Determine what order service configuration the Packers should use to achieve their goals, and explain your recommendation.
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Bob and Carol Packer operate a successful outdoor wear store in Vermont called North woods Backpackers. They stock mostly cold-weather outdoor items such as hiking and backpacking clothes, gear, and accessories. They established an excellent reputation throughout New England for quality products and service. Eventually, Bob and Carol noticed that more and more of their sales were from customers who did not live in the immediate vicinity but were calling in orders on the telephone. As a result, the Packers decided to distribute a catalog and establish a phone-order service. The order department consisted of five operators working eight hours per day from 10:00 A.M. to 6:00 P.M., Monday through Friday. For a few years the mail-order service was only moderately successful; the Packers just about broke even on their investment. However, during the holiday season of the third year of the catalog order service, they were overwhelmed with phone orders. Although they made a substantial profit, they were concerned about the large number of lost sales they estimated they incurred. Based on information provided by the telephone company regarding call volume and complaints from customers, the Packers estimated they lost sales of approximately $100,000. Also they felt they had lost a substantial number of old and potentially new customers because of the poor service of the catalog order department.
Prior to the next holiday season, the Packers explored several alternatives for improving the catalog order service. The current system includes the five original operators with computer terminals who work eight-hour days, five days per week. The Packers have hired a consultant to study this system, and she reported that the time for an operator to take a customer order is exponentially distributed with a mean of 3.6 minutes. Calls are expected to arrive at the telephone center during the six-week holiday season according to a Poisson distribution with a mean rate of 175 calls per hour. When all operators are busy, callers are put on hold, listening to music until an operator can answer.
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Operations Management Creating Value Along the Supply Chain
ISBN: 978-0470525906
7th Edition
Authors: Roberta S. Russell, Bernard W. Taylor
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