Required information Market Makers Incorporated (MMI) provides a range of services to its retail clients-customer service for inquiries, order taking, credit checking for new customers, and a variety of related services. Auto Supermarket (AS) is a large auto dealer that provides financing for the autos and trucks that it sells. AS has approached MMI to manage the inquiries that come in regarding these loans. AS is not satisfied with the performance of the call center it currently uses for handling inquiries on these loans and is considering a change to MMI. MMI has been asked to estimate the cost of providing the service for the coming year. There are two types of loans at AS, one for autos and SUVs and another for light trucks. The loans for auto and truck buyers typically have different types of customers and loan terms, so the nature and volume of the inquiries are expected to differ. MMI would use its own call center to handle the AS engagement. The MMI call center's annual costs are as follows: Call center costs Salaries Utilities Leasing of facilities Other expenses Total $ 4,323,555 2,587, 446 2,085,513 829,036 $ 9,825,550 MMI's call center is staffed 12 hours per day with 60 call staff always available. Each staff member has a paid 10-minute break for each hour worked, and an unpaid 1-hour break for a lunch/dinner during each 12-hour shift. Thus, the call center has 12,045,000 minutes (11 hr > 50 min ~ 60 staff * 365 days) available for calls during the year. AS and MMI work together to estimate the number of calls and time required for each call, based on AS's prior experience with its current call center. Total Calls Answered Average Number of Minutes/Call Total Time (minutes) 81,000 33,000 6 7 486,000 231,000 Inquiries Inquire re: rates and terms Autos Trucks Inquire re: loan application status Autos Trucks Inquire re: payment status Autos Trucks Inquire re: other matters Autos Trucks 46,000 6,850 5 11 230,000 75,350 40,000 13,000 3 4 120,000 52,000 30,000 8,600 11 15 330,000 129,000 1,653,350 Suppose that in addition to the call center engagement outlined earlier, MMI also provides the following annual service to 10 other clients: Platinum Regional Bank Healthwise Software Incorporated Johnson Manufacturing Lesco Online Shopping Babcock Insurance Service Garcia Electric Supply and Service Gilbert's Online Garden Supplies Financial Planning Services Incorporated Porter's Camera and Optical Jordan Auto World Incorporated Total Calls Answered 232,000 66,888 120,665 231,756 55,555 39,056 143,902 69,093 196,440 963,887 Average Number of Minutes/Call 6.0 5.0 4.0 6.0 5.5 3.4 4.5 11.0 5.5 3.5 Required: 1. What is the level of idle capacity at MMI, not assuming that AS becomes a customer? 2. Assume that AS comes back to MMI with a revised proposal. The revised proposal includes call center activity as described above, but in addition, AS wants MMI to provide error-checking services for those who apply for loans at AS. MMI would use some of the call center staff, after appropriate training, to complete the processing of the credit checks. AS expects the following service to be needed: Processing Credit Checks Auto Truck Requests 45,400 12,300 Minutes/Request 7 12 What would be the idle capacity with the revised proposal? What would be the cost of the idle capacity? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the level of idle capacity at MMI, not assuming that AS becomes a customer? (Round your intermediate calculations and final answers to the nearest whole number.) Idle Capacity minutes Complete this question by entering your answers in the tabs below. Required 1 Required 2 What would be the idle capacity with the revised proposal? What would be the cost of the idle capacity? (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole number.) minutes Revised Idle Capacity Cost Idle Capacity