WHITE CELLS ARE ADJUSTABLE

Kristoffer Burnett - Certified Management Accountant, 2009-2012

Small business solutions at http://www.imperoco.com

Managing Variability Example

Customer Waiting Time
Employees in sales department
Average hourly cost for sales dept. employee
Variable costs (per min)

4
26.50 This cost can include wages and benefits
0.05 Phone charges and any other variable costs associated with helping customers

$
$

2
1

Number of Employees
2
3
4
5
6

Employee
Expected Customer
Utilization
Waiting Time (min)
98.8%
192.8
65.9%
2.1
49.4%
0.5
39.5%
0.2
32.9%
0.1

Number of Employees
2
3
4
5
6

Probability That All

Employees Are
Potential Lost
Busy
Customers Per Min
40.0%
0.093
21.1%
0.049
9.5%
0.022
3.7%
0.009
1.2%
0.003

120.0%

Average
Expected Flow Customers Being
Time (min)
Helped
201.3
2.0
10.6
2.0
9.0
2.0
8.7
2.0
8.6
2.0

Average
Customers
Waiting
44.8
0.5
0.1
-

$16.00

Effect of Staffing Changes

$14.00
100.0%
$12.00
80.0%
$10.00

60.0%

$8.00

$6.00
40.0%
$4.00
20.0%
$2.00

0.0%

$-

4
Employee Utilization

Notes:
1
2
3
4
5
6
7
8

The percent of time employees spend helping customers at different staffing levels
Expected Customer Waiting Time + Average Call Length
Sum of Average Customers Waiting and Average Customers Being Helped
The cost of labor per customer helped, includes idle time.
The total variable costs incurred due to wait and activity time.
Cost of Labor Per Call + Cost of Line Charges Per Call
The probability of a customer calling and not being helped immediately
The number of customers that are potentially lost if they do not want to wait

5
Total Cost Per Call Received

Average
Cost of Line
Customers in
Cost of Labor Per Charges Per Call
System
Call Received
Received
46.8 $
3.80 $
10.07
2.5
5.70
0.53
2.1
7.60
0.45
2.0
9.50
0.44
2.0 $
11.41 $
0.43

Total Cost Per

Call Received
$
13.87
6.23
8.05
9.94
$
11.84

 Kristoffer Burnett - Certified Management Accountant, 20092012

Small business solutions at http://www.imperoco.com

WHITE CELLS ARE ADJUSTABLE

Managing Variability Example

Sales Department Call Log
1

Call Arrival Time

Call Completion
Time

8:03:38 AM

8:13:10 AM

8:07:16 AM
8:08:12 AM
8:11:42 AM
8:15:18 AM
8:16:55 AM
8:41:00 AM
8:44:49 AM
8:48:32 AM
8:50:00 AM
8:52:19 AM
8:53:00 AM
8:53:42 AM
8:55:11 AM
8:56:36 AM
8:56:49 AM
9:00:13 AM
9:03:54 AM
9:07:00 AM
9:10:33 AM
9:14:23 AM
9:15:23 AM
9:19:14 AM
9:23:02 AM
9:29:00 AM
9:32:46 AM
9:33:00 AM
9:36:30 AM
9:40:06 AM
9:40:50 AM
9:51:00 AM
9:54:45 AM
9:58:33 AM
10:02:18 AM
10:06:04 AM
10:09:55 AM
10:13:31 AM
10:26:00 AM
10:29:40 AM
10:33:26 AM
10:37:09 AM
10:40:55 AM
10:44:31 AM

8:20:55 AM
8:13:07 AM
8:18:40 AM
8:23:32 AM
8:26:57 AM
8:43:03 AM
8:53:58 AM
8:56:37 AM
9:00:42 AM
9:03:45 AM
9:08:10 AM
8:58:50 AM
8:59:24 AM
9:01:30 AM
9:07:17 AM
9:07:10 AM
9:11:07 AM
9:14:02 AM
9:14:19 AM
9:23:15 AM
9:26:01 AM
9:31:07 AM
9:25:33 AM
9:35:19 AM
9:41:01 AM
9:35:30 AM
9:43:04 AM
9:43:01 AM
9:48:54 AM
9:58:38 AM
10:03:46 AM
10:09:32 AM
10:16:09 AM
10:18:36 AM
10:19:58 AM
10:24:55 AM
10:40:37 AM
10:40:59 AM
10:38:20 AM
10:49:32 AM
10:50:59 AM
10:53:00 AM

Call Length (Min)

9.53
13.65
4.91
6.97
8.22
10.04
2.04
9.16
8.08
8.38
10.76
11.36
8.84
5.70
6.32
10.68
6.94
7.21
7.04
3.76
8.87
10.64
11.89
2.51
2.32
12.01
2.74
6.57
2.91
8.06
7.63
9.01
10.99
13.85
12.54
10.05
11.39
14.61
11.32
4.90
12.38
10.06
8.48

Interarrival Time
(Min)
3.64
0.94
3.48
3.61
1.61
24.08
3.82
3.71
1.47
2.32
0.68
0.71
1.48
1.41
0.22
3.41
3.67
3.10
3.56
3.83
0.99
3.84
3.82
5.96
3.76
0.24
3.50
3.60
0.73
10.16
3.74
3.80
3.76
3.76
3.86
3.60
12.48
3.67
3.76
3.71
3.77
3.60

Call Arrival Time

Call Completion
Time

10:59:00 AM

11:13:31 AM

11:02:40 AM
11:06:20 AM
11:08:59 AM
11:12:36 AM
11:16:00 AM
11:16:02 AM
11:19:42 AM
11:23:23 AM
11:25:19 AM
11:28:48 AM
11:32:32 AM
11:40:00 AM
11:43:44 AM
11:47:31 AM
11:51:07 AM
11:54:23 AM
11:55:42 AM
12:06:00 PM
12:09:08 PM
12:12:50 PM
12:16:38 PM
12:20:30 PM
12:24:10 PM
12:35:00 PM
12:38:39 PM
12:42:25 PM
12:46:10 PM
12:48:47 PM
12:52:26 PM
1:16:00 PM
1:19:31 PM
1:22:05 PM
1:25:44 PM
1:26:30 PM
1:30:13 PM
1:32:12 PM
1:38:00 PM
1:40:17 PM
1:44:02 PM
1:47:41 PM
1:48:47 PM
1:52:26 PM

11:15:09 AM
11:11:23 AM
11:11:20 AM
11:18:23 AM
11:22:59 AM
11:24:37 AM
11:30:19 AM
11:28:05 AM
11:29:56 AM
11:35:46 AM
11:39:51 AM
11:44:11 AM
11:47:27 AM
11:57:16 AM
12:04:21 PM
12:03:28 PM
12:09:55 PM
12:18:15 PM
12:12:50 PM
12:21:01 PM
12:30:13 PM
12:28:21 PM
12:27:36 PM
12:47:01 PM
12:43:09 PM
12:44:48 PM
12:58:59 PM
1:00:50 PM
12:57:25 PM
1:20:44 PM
1:27:57 PM
1:36:07 PM
1:40:33 PM
1:29:34 PM
1:37:39 PM
1:46:15 PM
1:44:12 PM
1:54:43 PM
1:53:06 PM
1:56:36 PM
2:01:38 PM
1:56:16 PM

Statistics
Average call length (min)
Standard deviation call length (min)
Coefficient of variation - call length
Average interarrival time (min)
Standard deviation interarrival time (min)
Coefficient of variation - interarrival time
Call length:interarrival ratio

Notes:
1 Call Completion Time - Call Arrival Time
2 Call Arrival Time - previous Call Arrival Time

8.5
3.8
0.447
4.3
4.1
0.953
2.0

This figure represents the volatility of call length

Standard deviation call length / Average call length
This figure represents the volatility of interarrival time
Standard deviation interarrival time / Average interarrival time
Average call length / Average interarrival time

Call Length (Min)

14.51
12.48
5.05
2.36
5.77
6.95
8.61
10.61
4.69
4.62
6.97
7.31
4.19
3.71
9.75
13.23
9.09
14.23
12.25
3.70
8.18
13.58
7.85
3.44
12.02
4.49
2.39
12.81
12.05
4.98
4.74
8.44
14.02
14.82
3.07
7.44
14.05
6.19
14.43
9.07
8.91
12.84
3.84

Interarrival Time
(Min)
14.48
3.67
3.66
2.65
3.63
3.39
0.04
3.67
3.69
1.93
3.48
3.73
7.47
3.73
3.79
3.60
3.27
1.31
10.30
3.14
3.70
3.80
3.86
3.66
10.84
3.66
3.76
3.76
2.61
3.66
23.56
3.51
2.58
3.64
0.76
3.71
1.99
5.80
2.29
3.74
3.66
1.09
3.64

Call Arrival Time

Call Completion
Time

2:06:00 PM

2:14:13 PM

2:09:47 PM
2:12:19 PM
2:15:22 PM
2:17:46 PM
2:20:09 PM
2:23:56 PM
2:38:00 PM
2:41:47 PM
2:43:57 PM
2:47:39 PM
2:49:47 PM
2:53:24 PM
2:54:57 PM
3:20:00 PM
3:23:38 PM
3:27:17 PM
3:29:01 PM
3:32:37 PM
3:35:03 PM
3:40:00 PM
3:43:38 PM
3:45:34 PM
3:49:10 PM
3:52:55 PM
3:54:59 PM
3:56:37 PM
4:07:00 PM
4:10:47 PM
4:12:40 PM
4:14:03 PM
4:17:02 PM
4:20:47 PM
4:37:00 PM
4:40:39 PM
4:44:28 PM
4:48:12 PM
4:49:52 PM
4:53:41 PM
4:57:28 PM
5:05:00 PM
5:08:40 PM
5:12:29 PM

2:12:01 PM
2:21:06 PM
2:17:52 PM
2:24:17 PM
2:30:18 PM
2:38:32 PM
2:50:04 PM
2:51:24 PM
2:57:45 PM
3:01:27 PM
2:52:36 PM
3:04:31 PM
3:07:26 PM
3:22:03 PM
3:26:11 PM
3:34:58 PM
3:36:24 PM
3:38:16 PM
3:49:24 PM
3:44:44 PM
3:54:59 PM
3:55:49 PM
4:02:14 PM
4:04:47 PM
4:04:34 PM
3:58:54 PM
4:10:10 PM
4:24:06 PM
4:25:49 PM
4:19:34 PM
4:19:50 PM
4:35:46 PM
4:50:42 PM
4:45:03 PM
4:52:12 PM
4:58:00 PM
4:57:23 PM
4:59:07 PM
5:08:58 PM
5:13:13 PM
5:16:50 PM
5:25:05 PM

Call Length (Min)

8.22
2.23
8.78
2.51
6.52
10.15
14.60
12.07
9.60
13.79
13.79
2.82
11.12
12.48
2.04
2.55
7.67
7.39
5.64
14.36
4.74
11.36
10.25
13.06
11.86
9.58
2.29
3.17
13.32
13.16
5.51
2.79
14.99
13.69
4.41
7.75
9.79
7.52
5.44
11.50
8.22
8.16
12.60

Interarrival Time
(Min)
13.57
3.79
2.53
3.04
2.40
2.39
3.77
14.07
3.79
2.16
3.70
2.13
3.63
1.54
25.05
3.63
3.66
1.73
3.60
2.43
4.95
3.63
1.93
3.61
3.74
2.07
1.63
10.38
3.79
1.87
1.40
2.98
3.74
16.22
3.64
3.82
3.74
1.66
3.82
3.79
7.54
3.67
3.82