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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