Assignment:
1. Suppose that you were thinking about opening a new restaurant. What type of information would you use to go about forecasting demand and sales?
2. Why is process thinking important in operations management? Thinking of yourself as an "operations manager" for your education, describe the processes you would put in place to improve your performance as a student.
3. If a manager asked you whether to use time series forecasting models or regression-based forecasting models, what would you tell him or her?
Mini Case - answer the questions at the end of the case below
Tri-Metro Investments: Forecasting Help Desk Demand by Day
"Hello, is this the Investment Management Help Desk?" said a tired voice on the other end of the telephone line at 7:42 am. "Yes, how can I help you?" said Thomas Bourbon, customer service representative (CSR).
"I've got a problem. My best customer, with investment assets of over $10 million in our bank, received her monthly trust account statement. She says we computed the market value of one of her stocks inaccurately by using the wrong share price, which makes her statement $42,000 too low. I assured her we would research the problem and get back to her by the end of the day. Also, do you realize that I waited over four minutes before you answered my call?" said the trust administrator, Claire Woodworth. "Ms. Woodworth, give me the customer's account number and the stock in question, and I will get back to you within an hour.
Let's solve the customer's problem first. I apologize for the long wait," said Bourbon in a positive and reassuring voice.
The Help Desk supports fiduciary operations activities worldwide by answering questions from company employees, such as portfolio managers, stock traders, backroom company process managers, branch bank managers, accountants, and trust account administrators. These internal customers originate over 98 percent of the volume of Help Desk inquiries. Over 50 different internal processes and organizational units call the
Help Desk. Some external customers such as large estate trust administrators are tied directly to their accounts via the Internet and occasionally call the Help Desk directly.
The Help Desk is the primary customer contact unit within fiduciary operations, employing 14 full-time customer service representatives (CSRs), three CSR support employees, and three managers, for a total of 20 people. The three CSR support employees work full-time on research in support of the CSRs answering the telephone.
The Help Desk handles about 2,000 calls a week and the pressure to reduce unit cost is ongoing. Forecast accuracy is a key input to better staffing decisions that minimize costs and maximize service. The accompanying table shows the number of calls per day (Call Volume).