A fraction of all health care claims require special processing. On any given day at a particular third party processing company, 500 claims need to be analyzed and processed. There are two types of employees that handle the claims processing; permanent employees that can each processes 25 claims a day, and on average make only 2 mistakes per day and temporary employees that can process 20 claims per day, but make on average 5 errors.
Each permanent employee costs the processing company $80/day while a temporary employee only costs $50. The company has set a quality goal of no more than 50 errors day on average. The company has 40 workstations available, each employee needs one.
How should the claims processing firm organize their claims processing?
Prepare a linear decision model to help the firm organize their processing.