View the step-by-step solution to:

Review, analyze, and complete the Chase Manhattan Bank Case Study below. The workload in many areas of bank operations has the characteristics of a...

Review, analyze, and complete the Chase Manhattan Bank Case Study below.

The workload in many areas of bank operations has the characteristics of a nonuniform distribution with respect to time of day. For example, at Chase Manhattan Bank in New York, the number of domestic money transfer requests received from customers, if plotted against time of day, would appear to have the shape of an inverted U curve with the peak around 1 P.M. For efficient use of resources, the personnel available should, therefore, vary correspondingly. A variable capacity can be achieved effectively by employing

part-time personnel. Because part-timers are not entitled to all the fringe benefits, they are often more economical than full-time employees. Other considerations, however, may limit the extent to which part-time people can be hired in a given department. The problem is to find an optimum workforce schedule that would meet personnel requirements at any given time and also be economical. Some of the factors affecting personnel assignment are listed here:

  1. By corporate policy, part-time personnel hours are limited to a maximum of 40% of the day's total requirement.
  2. Full-time employees work for 8 hours (1 hour for lunch included) per day. Thus, a full-timer's productive time is 35 hours per week.
  3. Part-timers work for at least 4 hours per day but less than 8 hours and are not allowed a lunch break.
  4. Fifty percent of the full-timers go to lunch between 11 A.M. and noon, and the remaining 50% go between noon and 1 P.M.
  5. The shift starts at 9 A.M. and ends at 7 P.M. (i.e., overtime is limited to 2 hours). Any work left over at 7 P.M. is considered holdover for the next day.
  6. A full-time employee is not allowed to work more than 5 hours overtime per week. He or she is paid at the normal rate for overtime hours—not at one-and-a-half times the normal rate applicable to hours in excess of 40 per week. Fringe benefits are not applied to overtime hours.

In addition, the following costs are pertinent:

1. The average cost per full-time personnel hour (fringe benefits included) is $10.11.

2. The average cost per overtime personnel hour for full-timers (straight rate excluding fringe benefits) is $8.08.

3. The average cost per part-time personnel hour is $7.82.

The personnel hours required, by hour of day, are given in the following Table.

TABLE: Workforce Requirements

NUMBER OF PERSONNEL TIME PERIOD REQUIRED 9-10 A.M. 14 10-11 25 11-12 26 12-1 P.M. 38 1-2 55 2-3 60 3-4 51 4-5 29 5-6 14 6-7 9


The bank's goal is to achieve the minimum possible personnel cost subject to meeting or exceeding the hourly workforce requirements as well as the constraints on the workers listed earlier.

Discussion Questions:

1. What is the minimum-cost schedule for the bank?

2. What are the limitations of the model used to answer question 1?

3. Costs might be reduced by relaxing the constraint that no more than 40% of the day's requirement be met by part-timers. Would changing the 40% to a higher value significantly reduce costs?


Course hero I would like to know how to setup this question up in excel QM or windows with(detailed instructions) as I have a hard time setting up Excel QM .I would also like the answer to question 2 of the discussions questions above. WHAT ARE THE LIMITATIONS OF THE MODEL USED TO NSWER QUESTION 1 Thanks Larry

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question