Payroll Planning, Inc.

Payroll Planning is a Boulder, Colorado, company that provides

accounting services for small businesses. Small businesses either drop
off their payroll records weekly, biweekly, or monthly or forward them
electronically via the Internet. Payroll Planning then processes the
records and issues the checks. The firm's main competitor is the
nationally known company PayChex, Inc. The following table shows the
processing times and types for jobs sent by Payroll Planning clients on
Friday, May 1.

PROCESSING TIME (IN

CLIENT TYPE MINUTES)
Allen Leather Weekly 33
Art World Biweekly 63
Beta Computing Monthly 95
Colon Clinic Monthly 87
Darrow Plumbing Weekly 72
Denver Broncos Weekly 15
Eden Roc Hotel Monthly 26
Fink's Garage Weekly 28
Golden Gloves Weekly 47
Gunter's Guns Weekly 32
Hug & Jordan Weekly 24
Izenman Ads Monthly 55
Jerry's Ice Cream Weekly 31
Keystone Repairs Weekly 33
Lifeblood, Inc. Weekly 25
Lisa's Bakery Weekly 48
Living Well Biweekly 42
Mortician Supply Weekly 43
Co.
New Life Vitamins Weekly 64
Owens & Marshal Monthly 42
Philly Cheesedogs Weekly 24
Quik Lube Weekly 14
Rockin' Robin Weekly 74
Sam's Sporting Monthly 110
Goods
Tennis n'More Weekly 18
Tetris, Inc. Weekly 13
Twins Emporium Weekly 22
Valvoline Electric Weekly 23
White's Dry Biweekly 64
Cleaner
Wilson & Jones Monthly 88
Wings of S. F. Weekly 8
Woodworth Auto Monthly 76
Z.A.G. Inc. Weekly 36
Zuesman Gym Weekly 42

When companies drop off or electronically transmit their records on

time, Payroll Planning typically manages to get the checks printed on
time. However, Payroll Planning has occasionally run into scheduling
difficulties. The company feels that examining what has happened in the
past will provide some insight into how to deal with similar situations in
the future.

Payroll Planning sets due dates according to the type of customer. For
monthly customers, the due date is 9:00 A.M.; for biweekly customers,
the due date is noon; and for weekly customers, the due date is 3:00 P.M.
All of the processing will begin on the third shift (at midnight) on the day
that the records are due.

Payroll Planning has been using an "earliest due date" scheduling rule
because this accords the highest priority to the monthly clients and the
lowest priority to the weekly. If clients come in only once per month,
there is less room for error (lateness) than if they use a weekly payroll.
While Payroll Planning has been following this logic for the past decade,
it wants to determine whether this is the best scheduling rule.

Source: Reprinted by permission of Professors Howard J. Weiss and Mark

E. Gershon, Temple University