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Tina Phung
January 31, 2008
BUAD 311; MW 23:50 pm
Homework 2: Capacity Management
1.
a. If the company did not hire new employees to replace those that left, we can expect the
employee rates to be zero after 8 months. Therefore, an agent at this call center can be
expected to work for an average of
8 months
.
b. The number of employees at any time in the company is a constant (1000). If 125 employees
leave and join the company every month, each employee is calculated to stay for 8 months. This
can be written as: 125 employees/ month x 8 month = 1000 employees.
If the company is seeking to increase average work time to 20 months, we can calculate the
number of employees leaving and joining the company by replacing the new statistics in the
above equation. (Z employees/month) x 20 months = 1000 employees. Solving for Z, we see that
the number of employees leaving/joining the company per month has reduced to 50. Therefore,
by reducing the number of new employees per month to 50, we can reduce hiring and training
costs by
$187,500 each month
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 Spring '07
 Vaitsos
 Management

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