ABC Managed Care an operator of 19 call centers has just hired you as their new Chief Operating Officer. The call centers are operated during regular business hours Monday through Friday (8am7pm) to handle calls from various subscribers of its insurance company clients. However, given the mobility of its telecommunications technology it is able to generate revenues from other call center functions (e.g., credit card company and airline customer service support) Currently, ABC manages 800,000 subscribers. Your project for the next year is to better manage the capacity utilization of its 19 call centers for the coming year.

Required:

1. Using the Call Centers as a context, explain what we mean by the following

terms:

Theoretical Capacity

Productive Capacity

Nonproductive Capacity

Idle Capacity

2. How are the four terms in (1) related?

3. Use the Call Centers as a context when answering the following questions:

(a) How do Theoretical and Practical capacity differ?

(b) Of what use is Theoretical Capacity?

(c) Of what use is practical capacity?