Recent competitive pressures have caused National Insurance Company to examine policies regarding personnel planning. As a start, the company has decided to experiment with and develop a time-driven ABC model for its claims processing center. A study of this support center indicates the following three primary activities: remote processing of customer claims, 0.4 hour, onsite processing of customer claims, 1.7 hour, and updating/maintaining customer records, 0.2 hour. Onsite processing is required for larger claims, while remote processing is done for smaller claims. (For onsite processing, assumefor simplicitythat the claims processors use their own automobiles.) All claims will require that the customers' records be updated. The claims processing center currently employs three full-time employees. Total annual cost of the center (salaries, depreciation, utilities, etc.) is estimated at $180,600. The net amount of available personnel time per year for this department is approximately 4,300 hours. Required: 3. Assume that the budgeted number of offsite (i.e., remote) claims is 1,290 for the year. What is the budgeted claims-processing support cost to serve this subset of customers? 4. Assume that the budgeted number of onsite (i.e., large) claims for the coming year is 2,600. What is the budgeted claims-processing support cost for this subset of customers? 5. Assume now that the customer mix reflected in requirements 2 and 3 were to change as follows: number of remote cases, 2,400; number of onsite claims, 1,500. How much labor processing time would be needed to service this revised level of service demand? What support cost would be budgeted for each class of customer? Required: 3. Assume that the budgeted number of offsite (i.e., remote) claims is 1,290 for the year. What is the budgeted claims-processing support cost to serve this subset of customers? 4. Assume that the budgeted number of onsite (i.e., large) claims for the coming year is 2,600. What is the budgeted claims-processing support cost for this subset of customers? 5. Assume now that the customer mix reflected in requirements 2 and 3 were to change as follows: number of remote cases, 2,400; number of onsite claims, 1,500. How much labor processing time would be needed to service this revised level of service demand? What support cost would be budgeted for each class of customer? Complete this question by entering your answers in the tabs below. Req 3 and 4 Reg 5 3. Assume that the budgeted number of offsite (i.e., remote) claims is 1,290 for the year. What is the budgeted claims- processing support cost to serve this subset of customers? 4. Assume that the budgeted number of onsite (i.e., large) claims for the coming year is 2,600. What is the budgeted claims- processing support cost for this subset of customers? (Round "Processing time/claim" and "Customer record maintenance/claim" answers to 2 decimal places.) Show less A Claim Information Remote Processing On-site Total Processing 0.00 0.00 Processing time/claim Customer record maintenance/claim Total time per claim * Number of claims Total hours needed * Capacity cost per hour Budgeted support costs 0 Reg 3 and 4 Reg 5 Assume now that the customer mix reflected in requirements 2 and 3 were to change as follows: number of remote cases, 2,400; number of onsite claims, 1,500. How much labor processing time would be needed to service this revised level of service demand? What support cost would be budgeted for each class of customer? (Round "Processing time/claim" and "Customer record maintenance/claim" answers to 2 decimal places.) Show less Remote Processing On-site Processing Total 0.00 0.00 Claim Information Processing time/claim Customer record maintenance/claim Total time per claim * Number of claims Total hours needed * Capacity cost per hour Budgeted support costs 0
