Office Equipment Plc



Office Equipment Plc

Introduction

This case is based on analyzing the managerial aspects of the company named Office Equipment plc. The company leases automatic mailing machines to business customers in Fort Wayne, Indiana.. The company operates in B2B market. Currently, OEI has 10 customers with service contracts. One service technician is responsible for handling all service calls. A statistical analysis of historical service records indicates that a customer requests a service call at an average rate of one call per 50 hours of operation. OEI is planning to expand its business. Before making a final decision, management would like an analysis of OEI service capabilities. OEI is particularly interested in meeting the average three-hour waiting time guarantee at the lowest possible total cost. This paper also includes recommendations regarding the number of technicians to be used when OEI reaches 20 customers and when OEI reaches 30 customers.

Organization Background

The organization that our group chooses is Office Equipment, Inc. (OEI), which is an automatic mailing machines leasing company in Fort Wayne, Indiana. At present, the company has 10 customers with service contracts and only one service technician is responsible for all service calls. If a customer calls when the service technician is available, it takes an average of one hour of travel time for the technician to reach the customer's office and an average of 1.5 hours to finish the repair service. But if the technician is busy with another customer when a new customer calls for service, the new customer has to wait. The cost of wait time and service time for customers is$100 per hour.

Problem Area under Study

Now the company wants to expand its business. They would like to have 20customers within one year and 30 customers within two years. Here comes the problem, they are not sure whether or not one technician can handle the work when the customer base expands. They may add a second technician when they have 20customers and a third technician when they have 30 customers. The bottom line is that the company wants to meet the average three-hour waiting time guarantee at the lowest possible total cost. And our group also studies how many service technicians should OEI hire after the company expands its business, and we try to find the best solution to meet the demands of customers and to minimize the cost of the company

Quantitative Method Applied

In our report, we use waiting line models to analyze the Office Equipment, Inc. service capabilities. Waiting line models are also called queuing models. The theory of waiting lines is one of the oldest and most widely used quantitative analysis techniques. It can help managers understand the situation of business and make better decisions concerning the operation of waiting lines [1]. What's more, it can help managers evaluate the cost and effectiveness of service system. By using this theory, we will describe queuing situations and present mathematical models for analyzing waiting lines following certain assumptions [2]. And then we will make recommendations regarding the number ...