Fourth Annual Contest: SM Office Repair

SM Office Repair was started as a sideline business to supplement the income from an existing office-supply store. The idea was to provide timely, quality service to customers who had purchased office equipment. This portion of the business was an immediate success and was quickly expanded to other locations, without the accompanying supply store. The key to this success was in providing timely service based on the contract the customer had purchased (more on this later). Continued expansion is planned based on our ability to staff these new operations intelligently. Although each new operation to date has been successful, the task of determining the staffing requirements and method of dispatching has become a major corporate headache.

SM Office Repair provides equipment repair from 8 AM to 5 PM, Monday through Friday (excluding bank holidays). Customers can select from various types of contracts for service on different types of equipment. For this study, wed like you to perform an analysis based on our operations at an existing location thats typical of what we anticipate creating in new offices. We have collected information about this offices operations over the last several months, so you should be able to examine the business thoroughly.

The operation to be analyzed has four equipment types, each of which is considered to be a different contract: Type 1000, Type 2000, Type 3000, and Type 4000. Each contract offers two possible types of service that can be purchased: Premium and Basic.

Premium service. This provides for a three-hour response time, guaranteeing that service will be started within three hours of the time that the service call is received. This three-hour time period does not include any time during which services are not normally provided. For example, if a service call is received at 4 PM on Friday, the company has until 10 AM on Monday to respond. The response time is measured from the time that the call is received until the repairperson arrives, not when the service is completed.

Basic service. This provides a 24-hour response timeservice is guaranteed to start within the next day, not including the weekend or holidays. Thus, for a call received at 4 PM on Friday, the company has until 4 PM on Monday to respond.

Currently there are two classes of service personnel available to take service calls: Class A and Class B. Class A service personnel are qualified to service only the Type 1000 and Type 2000 equipment. Class B service personnel can service all four types of equipment. Periodically, the service personnel need to replenish their stock of repair items and other inventory that they stock. It is estimated that this activity consumes about 10% of their idle time.

IIE/RA CONTEST PROBLEMS

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2 IIE/RA CONTEST PROBLEMS

All requests for service are made to a central dispatching center. If a qualified service person is currently available, the individual is called using cell-phone technology and is assigned the service call. The service person travels to the customer site and performs the service. When the service is complete, the service person calls dispatch and informs them that the job is finished and requests the next service-call assignment.

All service personnel are available from 8 AM until 5 PM. During that time, they are allocated a one-hour lunch break. They never interrupt a service call for lunch, but take their one-hour break between service calls. However, they try to schedule their lunch break between 11:30 AM and 1:30 PM.

Service personnel are never dispatched to a call after 4:30 PM, but are allowed to use that time to complete paperwork. If any basic services are in progress at 5 PM, the service personnel are allowed to work on those calls until they are completed or until 5:30 PM, whichever comes first. No basic service is provided after 5:30 PM. If a service call is interrupted, the service person will return at 8 AM the next workday to complete the service. Premium service calls that are in progress at 5 PM are always completed. All service time that occurs after 5 PM requires the payment of overtime, a 75% additional cost.

Very few service calls, 1.5%, require a return visit. These calls must be made by the same service person and must be scheduled on the next workday.

Our current data for service calls are based on equipment type and are included in the following table. The data entries are calls per hour for each equipment type.

Time Period Type 1000

8AM9AM 7 9AM10AM 12 10AM11AM 10

Type 2000

8 11 8 9 6 4 3 3 2

Type 3000

5 6 5 4 3 3 2 2 1

Type 4000

2 3 4 3 2 1 1 1 1

Type 4000

15

85

11AMNOON NOON1PM 1PM2PM 2PM3PM 3PM4PM 4PM5PM

7 5 4 5 4 3

The percentage of basic and premium contracts is given next.

Service Type

Basic

Premium

Type 1000

35

65

Type 2000

30

60

Type 3000

25

75

The travel time, independent of type or service personnel, is estimated to have a mean of about 30 minutes. Typically, it takes at least 10 minutes, and only under extreme con- ditions does it take more than 45 minutes.

We have collected a limited amount of service-time data (by equipment type), but have not had time to analyze the information properly. We assume this is not a problem and have included the raw data files (named Type1000.dat, Type2000.dat, Type3000.dat, and Type4000.dat) with this material for your use.

We would like to achieve several objectives using the simulation model. We would like a recommended staffing level for the operation under study. We are aware that its not always possible to meet the time guarantees set forth in our contracts, but in general, we have found that if we meet these about 85% of the time, our customers are satisfied. However, we would like to increase this satisfaction level to about 95%.

Obviously, we would like a staffing recommendation that provides the required service levels at minimum cost. Our current standard costs for service personnel are $41per hour for Class B and $26 per hour for Class A. Please include with your proposal a cost estimate of staffing levels based on an operating cost per day.

We are also very interested in obtaining a better understanding of the cost differential that should be charged to customers for the premium service versus the basic service. Any recommendations that you can provide in this area will be greatly appreciated.

We would also like detailed recommendations on how to dispatch our service personnel. We would like a methodology that would be fair to all our customers and improve the overall performance of the operation.

Finally, we plan to expand the number of operations throughout our service area. The new operations will have variable demands, and wed like a recommendation on how we can develop optimal staffing levels for each of them. We hope that it is not necessary to create a new simulation and perform a complete analysis for each operation. Thus, your final report should address this issue.