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Solution Library
Resource Utilization in Operations Management
Question
Cindy’s summer internship takes her to a Southwest Airlines reservation center. A sea of 1,000 telephone service representatives are answering calls concerning flight times, booking of reservations, handling of customer complaints, etc. She have received the following memo from a Southwest Airlines manager requesting a “downsizing” of service representatives at this reservation center.
“Worker utilization is getting too low. Our workers now average about 20% idle time. The average waiting time for our customers is now only 5 seconds. That is, they spend an average of only 5 seconds on hold before a service representative can answer their call. In keeping with our low cost philosophy, I recommend that we cut the work force by 10%. The resulting 10% increase in average customer hold time to 5.5 seconds is a trade-off that I believe is warranted by the cost savings.”
Is this analysis appropriate?
a) Yes.
b) No.
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