Unit Cost/ Shift Shift Shift Shift Shift

Cost per Shift

Total
Shift Covers Time Period (1=yes, 0=no Working
Time Period
9am-10am
10am-11am
11am-12pm
12pm-1pm
1pm-2pm
2pm-3pm
3pm-4pm
4pm-5pm
5pm-6pm
6pm-7pm

Shift Shift Shift Shift Shift

Solution
 Minimum CSRs
Needed

≥ 14
≥ 25
≥ 26
≥ 38
≥ 55
≥ 60
≥ 51
≥ 29
≥ 14
≥ 19

Total Cost
of Labor per day
Team Assignment - week 7 - BUSN 6Group Members:
Case Study: Chase Manhattan Bank

Scenario: The workload in many areas of bank operations has the characteristics of a non-uniform distribution with
respect to time of day. For example, at Chase Manhattan Bank in New York, the number of domestic
money transfer requests received from customers, if plotted against time of day, would appear to have the
shape of an inverted U curve with the peak around 1 P.M. For efficient use of resources, the personnel
available should, therefore, vary correspondingly. A variable capacity can be achieved effectively by
employing part-time personnel. Because part-timers are not entitled to all the fringe benefits, they are often
more economical than full-time employees. Other considerations, however, may limit the extent to which
part-time people can be hired in a given department. The problem is to find an optimum workforce
schedule that would meet personnel requirements at any given time and also be economical.

1. What is the minimum-cost schedule for the bank?

Objective Function:
Minimize total personnel cost: $80.88F + $31.28 (P1+P2+P3+P4+P5+P6+P7) + $16.16FO
Let:
F full-time tellers where F≤35
FO full-time tellers working OT where FO ≤ 5
P1 part-timers (PT) start 9am, leave between 1pm
P2 PT start at 10am, leave between 2pm
P3 PT start at 11am, leave between 3pm
P4 PT start at 12pm, leave between 4pm
P5 PT start at 1pm, leave between 5pm
P6 PT start at 2pm, leave at 6pm
P7 part-timers working 3-7
Limitations:
Part time workers cannot exceed 40% of total hours required each day,
which is the sum of the tellers needed each hour
4 (P1 + P2 + P3 + P4 + P5 + P6 + P7) ≥ 0.40 (14 + 25 + 26 + 38 + 55 + 60 + 51 + 29 + 14 + 19)

4P1+4P2+4P3+4P4+4P5+4P6+4P7 ≤ .40 (331)

Variables F P1 P2 P3 P4 P5 P6 P7 FO
Values 29.27 0.00 0.00 11.37 21.73 0.00 0.00 0.00 0.00
Cost $ 80.88 $ 31.28 $ 31.28 $ 31.28 $ 31.28 $ 31.28 $ 31.28 $ 31.28 $ 16.16

Shift Covers Time Period (1=yes, 0=no)

Constraints LHS
9am-10am 1 1 1 29.27 ≥
10am-11a 1 1 1 29.27 ≥
11am-12p 0.5 1 1 1 26.00 ≥
12pm-1p 0.5 1 1 1 1 47.73 ≥
1pm-2pm 1 1 1 1 1 62.37 ≥
2pm-3pm 1 1 1 1 1 62.37 ≥
3pm-4pm 1 1 1 1 1 51.00 ≥
4pm-5pm 1 1 1 1 29.27 ≥
5pm-6pm 1 1 1 29.27 ≥
6pm-7pm 1 1 29.27 ≥
Max. Full 1 29.27 ≤
Total PT hours 4 4 4 4 4 4 4 132.40 ≤

Total Cost
of Labor
 $ 3,402.46

2. What are the limitations of the model used to answer question 1?

By corporate policy, part-time personnel hours are limited to a maximum of 40% of the day’s total requirement.
Full-time employees work for 8 hours (1 hour for lunch included) per day. Thus, a full-timer’s productive time is 35 hours per week.
Part-timers work for at least 4 hours per day but less than 8 hours and are not allowed a lunch break.
Fifty percent of the full-timers go to lunch between 11 A.M. and noon, and the remaining 50% go between noon and 1 P.M.
The shift starts at 9 A.M. and ends at 7 P.M. (i.e., overtime is limited to 2 hours). Any work left over at 7 P.M. is considered holdover for the n
A full-time employee is not allowed to work more than 5 hours overtime per week. He or she is paid at the normal rate for overtime hours—n
and-a-half times the normal rate applicable to hours in excess of 40 per week. Fringe benefits are not applied to overtime hours.

3. Costs might be reduced by relaxing the constraint that no more than 40% of the day’s requirement be met by part-timers. Would changing the 40% to a h
significantly reduce costs?

Answer: When looking at this question and looking at the constraint of 40% part time hours we have 132.40 part time hours with a minimum cost of $3402
By increasing the constraint to 41% we gain part time hours to 135.71 and the minimum cost is $3396.99 dollars a decrease of $5.47. When the constraint i
42% the part time hours increase to 139.02 and a minimum cost of $3391.62 dollars, a decrease of $10.84. An increase of the constraint to 43% will gain 1
time hours and a minimum cost of $3386.33, a decrease of $16.13. Increasing to 44% will gain 145.64 part time hours and a minimum cost of $3381.13 do
decrease of $21.33. I went to 45% which will gain 148.95 part time hours and a minimum cost of $3376.01 dollars, a decrease of $26.45. These are not sig
decreases but at 45% you gain two (2) full time employee hours (132.40-148.95=16.55 hours) for only $26 dollars.

40%
Constrai
nts
9am- LHS
10am
10am- 1 1 1 29.27 ≥
11am
11am- 1 1 1 29.27 ≥
12pm
12pm- 0.5 1 1 1 26 ≥
1pm 0.5 1 1 1 1 47.73 ≥
1pm-
2pm
2pm- 1 1 1 1 1 62.37 ≥
3pm
3pm- 1 1 1 1 1 62.37 ≥
4pm
4pm- 1 1 1 1 1 51 ≥
5pm
5pm- 1 1 1 1 29.27 ≥
6pm
6pm-
Max. 1 1 1 29.27 ≥
7pm
Full
Total 1 1 29.27 ≥
Time
PT 1 29.27 ≤
hours 4 4 4 4 4 4 4 4 132.4 ≤

Total Cost
of Labor
3,402.46
41%
Constrai
nts
9am- LHS
10am
10am- 1 1 1 29.11 ≥
11am
11am- 1 1 1 29.11 ≥
12pm
12pm- 0.5 1 1 1 26 ≥
1pm
1pm- 0.5 1 1 1 1 38 ≥
2pm
2pm- 1 1 1 1 1 62.45 ≥
3pm
3pm- 1 1 1 1 1 62.45 ≥
4pm
4pm- 1 1 1 1 1 51 ≥
5pm
5pm- 1 1 1 1 39 ≥
6pm
6pm-
Max. 1 1 1 29.11 ≥
7pm
Full
Total 1 1 29.11 ≥
Time
PT 1 29.11 ≤
hours 4.1 4.1 4.1 4.1 4 4 4 4 135.71 ≤

Total Cost
of Labor
3,396.99
42%
Constrai
nts LHS
9am-
10am
10am- 1 1 1 28.95 ≥
11am
11am- 1 1 1 28.95 ≥
12pm
12pm- 0.5 1 1 1 26 ≥
1pm
1pm- 0.5 1 1 1 1 38 ≥
2pm
2pm- 1 1 1 1 1 62.53 ≥
3pm
3pm- 1 1 1 1 1 62.53 ≥
4pm
4pm- 1 1 1 1 1 51 ≥
5pm
5pm- 1 1 1 1 39 ≥
6pm
6pm-
Max. 1 1 1 28.95 ≥
7pm
Full
Total 1 1 28.95 ≥
Time
PT 1 28.95 ≤
hours 4.2 4.2 4.2 4.2 4 4 4 4 139.02 ≤

Total Cost
of Labor
3,391.62
43%
Constrai
nts
9am- LHS
10am
10am- 1 1 1 31.4 ≥
11am
11am- 1 1 1 31.4 ≥
12pm
12pm- 0.5 1 1 1 26 ≥
1pm
1pm- 0.5 1 1 1 1 38 ≥
2pm
2pm- 1 1 1 1 1 60 ≥
3pm
3pm- 1 1 1 1 1 60 ≥
4pm
4pm- 1 1 1 1 1 51 ≥
5pm
5pm- 1 1 1 1 39 ≥
6pm
6pm-
Max. 1 1 1 28.79 ≥
7pm
Full
Total 1 1 28.79 ≥
Time
PT 1 28.79 ≤
hours 4.3 4.3 4.3 4.3 4 4 4 4 142.33 ≤

Total Cost
 of Labor
3,386.33
44%
Constrai
nts
9am- LHS
10am
10am- 1 1 1 28.64 ≥
11am
11am- 1 1 1 28.64 ≥
12pm
12pm- 0.5 1 1 1 26 ≥
1pm
1pm- 0.5 1 1 1 1 38 ≥
2pm
2pm- 1 1 1 1 1 60 ≥
3pm
3pm- 1 1 1 1 1 60 ≥
4pm
4pm- 1 1 1 1 1 51 ≥
5pm
5pm- 1 1 1 1 39 ≥
6pm
6pm-
Max. 1 1 1 31.32 ≥
7pm
Full
Total 1 1 31.32 ≥
Time
PT 1 28.64 ≤
hours 4.4 4.4 4.4 4.4 4 4 4 4 145.64 ≤

Total Cost
of Labor
3,381.13
45%
Constrai
nts
9am- LHS
10am
10am- 1 1 1 28.49 ≥
11am
11am- 1 1 1 31.24 ≥
12pm
12pm- 0.5 1 1 1 26 ≥
1pm
1pm- 0.5 1 1 1 1 38 ≥
2pm
2pm- 1 1 1 1 1 62.76 ≥
3pm
3pm- 1 1 1 1 1 60 ≥
4pm
4pm- 1 1 1 1 1 51 ≥
5pm
5pm- 1 1 1 1 39 ≥
6pm
6pm- 1 1 1 28.49 ≥
7pm 1 1 28.49 ≥
Max.
Full
Total
Time
PT 1 28.49 ≤
hours 4.5 4.5 4.5 4.5 4 4 4 4 148.95 ≤

Total Cost
of Labor
3,376.01
RHS
14
25
26
38
55
60
51
29
14
19
35
132.4
5 hours per week.

and 1 P.M.
onsidered holdover for the next day.
l rate for overtime hours—not at one-
overtime hours.

Would changing the 40% to a higher value

with a minimum cost of $3402.46 dollars.

of $5.47. When the constraint is raised to
e constraint to 43% will gain 142.33 part
minimum cost of $3381.13 dollars, a
se of $26.45. These are not significant cost

RHS
14
25
26
38
 55
60
51
29
14
19
35
132.4

RHS
14
25
26
38
55
60
51
29
14
19
35
135.71

RHS
 14
25
26
38
55
60
51
29
14
19
35
139.02

RHS
14
25
26
38
55
60
51
29
14
19
35
142.33
RHS
14
25
26
38
55
60
51
29
14
19
35
145.64

RHS
14
25
26
38
55
60
51
29
14
19
 35
148.95
2.
ByWhat are thepolicy,
corporate limitations of the personnel
part-time model usedhours
to answer
are question
limited to1?a maximum of 40% of the day’s total requirement.
Full-time employees work for 8 hours (1 hour for lunch included) per day. Thus, a full-timer’s productive time is 35 hours per week.
Part-timers work for at least 4 hours per day but less than 8 hours and are not allowed a lunch break.
Fifty percent of the full-timers go to lunch between 11 A.M. and noon, and the remaining 50% go between noon and 1 P.M.
The shift starts at 9 A.M. and ends at 7 P.M. (i.e., overtime is limited to 2 hours). Any work left over at 7 P.M. is considered holdover
for the next day.
A full-time employee is not allowed to work more than 5 hours overtime per week. He or she is paid at the normal rate for overtime
hours—not at one-and-a-half times the normal rate applicable to hours in excess of 40 per week. Fringe benefits are not applied to
overtime hours.

3. Costs might be reduced by relaxing the constraint that no more than 40% of the day’s requirement be met by part-timers. Would changing the
40% to a higher value significantly reduce costs?

Answer: When looking at this question and looking at the constraint of 40% part time hours we have 132.40 part time hours with a minimum cost
of $3402.46 dollars. By increasing the constraint to 41% we gain part time hours to 135.71 and the minimum cost is $3396.99 dollars a decrease of
$5.47. When the constraint is raised to 42% the part time hours increase to 139.02 and a minimum cost of $3391.62 dollars, a decrease of $10.84.
An increase of the constraint to 43% will gain 142.33 part time hours and a minimum cost of $3386.33, a decrease of $16.13. Increasing to 44%
will gain 145.64 part time hours and a minimum cost of $3381.13 dollars, a decrease of $21.33. I went to 45% which will gain 148.95 part time
hours and a minimum cost of $3376.01 dollars, a decrease of $26.45. These are not significant cost decreases but at 45% you gain two (2) full time
employee hours (132.40-148.95=16.55 hours) for only $26 dollars.

40%
Constrai
nts
9am- LHS RHS
10am
10am- 1 1 1 29.27 ≥ 14
11am
11am- 1 1 1 29.27 ≥ 25
12pm
12pm- 0.5 1 1 1 26 ≥ 26
1pm
1pm- 0.5 1 1 1 1 47.73 ≥ 38
2pm
2pm- 1 1 1 1 1 62.37 ≥ 55
3pm 1 1 1 1 1 62.37 ≥ 60
3pm-
4pm
4pm- 1 1 1 1 1 51 ≥ 51
5pm
5pm- 1 1 1 1 29.27 ≥ 29
6pm
6pm-
Max. 1 1 1 29.27 ≥ 14
7pm
Full 1 1 29.27 ≥ 19
Time
Total PT 1 29.27 ≤ 35
hours 4 4 4 4 4 4 4 4 132.4 ≤ 132.4
Total
Cost
of Labor
###
41%
Constrai
nts
9am- LHS RHS
10am
10am- 1 1 1 29.11 ≥ 14
11am
11am- 1 1 1 29.11 ≥ 25
12pm
12pm- 0.5 1 1 1 26 ≥ 26
1pm
1pm- 0.5 1 1 1 1 38 ≥ 38
2pm
2pm- 1 1 1 1 1 62.45 ≥ 55
3pm
3pm- 1 1 1 1 1 62.45 ≥ 60
4pm
4pm- 1 1 1 1 1 51 ≥ 51
5pm
5pm- 1 1 1 1 39 ≥ 29
6pm
6pm-
Max. 1 1 1 29.11 ≥ 14
7pm
Full 1 1 29.11 ≥ 19
Time
Total PT 1 29.11 ≤ 35
hours 4.1 4.1 4.1 4.1 4 4 4 4 135.71 ≤ 135.71
Total
Cost
of Labor
###
42%
Constrai
nts
9am- LHS RHS
10am
10am- 1 1 1 28.95 ≥ 14
11am 1 1 1 28.95 ≥ 25
11am-
12pm
12pm- 0.5 1 1 1 26 ≥ 26
1pm
1pm- 0.5 1 1 1 1 38 ≥ 38
2pm
2pm- 1 1 1 1 1 62.53 ≥ 55
3pm
3pm- 1 1 1 1 1 62.53 ≥ 60
4pm
4pm- 1 1 1 1 1 51 ≥ 51
5pm
5pm- 1 1 1 1 39 ≥ 29
6pm
6pm-
Max. 1 1 1 28.95 ≥ 14
7pm
Full 1 1 28.95 ≥ 19
Time
Total PT 1 28.95 ≤ 35
hours 4.2 4.2 4.2 4.2 4 4 4 4 139.02 ≤ 139.02
Total
Cost
of Labor
###
43%
Constrai
nts
9am- LHS RHS
10am
10am- 1 1 1 31.4 ≥ 14
11am
11am- 1 1 1 31.4 ≥ 25
12pm
12pm- 0.5 1 1 1 26 ≥ 26
1pm
1pm- 0.5 1 1 1 1 38 ≥ 38
2pm
2pm- 1 1 1 1 1 60 ≥ 55
3pm
3pm- 1 1 1 1 1 60 ≥ 60
4pm
4pm- 1 1 1 1 1 51 ≥ 51
5pm
5pm- 1 1 1 1 39 ≥ 29
6pm
6pm-
Max. 1 1 1 28.79 ≥ 14
7pm
Full 1 1 28.79 ≥ 19
Time
Total PT 1 28.79 ≤ 35
hours 4.3 4.3 4.3 4.3 4 4 4 4 142.33 ≤ 142.33
Total
Cost
of Labor
###
 44%
Constrai
nts
9am- LHS RHS
10am
10am- 1 1 1 28.64 ≥ 14
11am
11am- 1 1 1 28.64 ≥ 25
12pm
12pm- 0.5 1 1 1 26 ≥ 26
1pm
1pm- 0.5 1 1 1 1 38 ≥ 38
2pm
2pm- 1 1 1 1 1 60 ≥ 55
3pm
3pm- 1 1 1 1 1 60 ≥ 60
4pm
4pm- 1 1 1 1 1 51 ≥ 51
5pm
5pm- 1 1 1 1 39 ≥ 29
6pm
6pm-
Max. 1 1 1 31.32 ≥ 14
7pm
Full 1 1 31.32 ≥ 19
Time
Total PT 1 28.64 ≤ 35
hours 4.4 4.4 4.4 4.4 4 4 4 4 145.64 ≤ 145.64
Total
Cost
of Labor
###
45%
Constrai
nts
9am- LHS RHS
10am
10am- 1 1 1 28.49 ≥ 14
11am
11am- 1 1 1 31.24 ≥ 25
12pm
12pm- 0.5 1 1 1 26 ≥ 26
1pm
1pm- 0.5 1 1 1 1 38 ≥ 38
2pm
2pm- 1 1 1 1 1 62.76 ≥ 55
3pm
3pm- 1 1 1 1 1 60 ≥ 60
4pm
4pm- 1 1 1 1 1 51 ≥ 51
5pm
5pm- 1 1 1 1 39 ≥ 29
6pm
6pm-
Max. 1 1 1 28.49 ≥ 14
7pm
Full 1 1 28.49 ≥ 19
Time
Total PT 1 28.49 ≤ 35
hours 4.5 4.5 4.5 4.5 4 4 4 4 148.95 ≤ 148.95
Total
Cost
of Labor
###
ours per week.

1 P.M.
sidered holdover

te for overtime
e not applied to

uld changing the

h a minimum cost
ollars a decrease of
ecrease of $10.84.
ncreasing to 44%
148.95 part time
ain two (2) full time