Based on the data below, compute the cost per case and select the best method of increasing customer service capacity based on cost per case.
Understand the Problem
The question is asking to compute the cost per case for different actions to increase customer service capacity and to select the best method based on this cost analysis.
Answer
The best method is to add a second monitor to each desk with a cost per call of $8$.
Answer for screen readers
The best method is to add a second monitor to each desk with a cost per call of $8$.
Steps to Solve
- Identify the formula for cost per case
To calculate the cost per case (or per call in this context), use the formula:
$$ \text{Cost Per Call} = \frac{\text{Annual Cost}}{\text{Added Calls}} $$
- Calculate the cost per call for adding a second monitor
For this action, the annual cost is $4000$ and the added calls are $500$. Using the formula:
$$ \text{Cost Per Call} = \frac{4000}{500} = 8 $$
- Calculate the cost per call for outsourcing overflow to a contractor
For this action, the annual cost is $36000$ and the added calls are $2000$. Using the formula:
$$ \text{Cost Per Call} = \frac{36000}{2000} = 18 $$
- Calculate the cost per call for improving the self-help feature on the website
For this action, the annual cost is $3000$ and the added calls are $200$. Using the formula:
$$ \text{Cost Per Call} = \frac{3000}{200} = 15 $$
- Compare the cost per call results
Now compare the calculated cost per call for each method:
- Adding a second monitor: $8$
- Outsourcing: $18$
- Improving self-help: $15$
- Select the best method
The best method is the one with the lowest cost per call. Therefore, adding a second monitor to each desk is the best option.
The best method is to add a second monitor to each desk with a cost per call of $8$.
More Information
This calculation helps determine cost-effectiveness in increasing customer service capacity. A lower cost per call translates to a more efficient use of resources, allowing for better customer service at a reduced expense.
Tips
- Miscalculating the annual cost or added calls leading to incorrect cost per call values. Always double-check your arithmetic.
- Forgetting to compare all options before selecting the best method. Ensure to review all calculations.
AI-generated content may contain errors. Please verify critical information
