OPERATIONS MANAGEMENT

CASE NO. 2a
 Presented By:
Rolando C. Angustia III
John Andrew Maddela
Mark Andrie O. Narvaez
Jen rich L. Escala
Ivan Pablico

BSCMM 3-YA-2

Submitted to:

Mr. Ronald Victor Perez

 OPERATIONS MANAGEMENT CASE NO. 2a
Synergy Business Processing Corporation, a BPO company catering to banking,
electronics, and warranty have been in operation for five years. Currently there are two
offices that houses their manpower of over two hundred and fifty-five employees.
Further information provided that under the banking accounts, there is currently five
projects, in the electronics account there are six accounts, and lastly the warranty
account has three accounts.
Currently the banking account is the leading account in terms of employee
performance, boasting a score of 95% positivity rate from both the callers and client. It
is considered that the banking account currently has one hundred twelve agents, and
the following information provides the number of agents per account assignment:
 Furthermore, it should be considered that the banking account has three shifts
scheduled. This was done by the owners of the company to cater to the calls of both
international and local, the director of operations also provided the schedule of each
shift as follow:
 Among the said schedule provided, it is worth noting that most of the active calls occur
during the morning and graveyard shift, as such, the director of operations has concluded
that during those periods all agents are at maximum capacity. It should also be considered
that the banking account is housed in the main office of the company, which is situated at 10
Roman Ayson Road, Baguio City. Apart from the banking account, the warranty account is
also housed in the main office but only a fourth of the team is assigned to the area.
The data given by the team leaders suggested that there are short downtimes that are
considered in those shift time which are caused by the disconnection of internet services.
While the disconnection might be brief it did incur complaints from the callers, inferring that
calls would be dropped midway through. This is also the main reason as to why the director
of operations has assigned six IT technicians per shift to ensure that internet connectivity will
be monitored and routed accordingly to lessen the downtime for the account. The following
are the IT personnel assigned and their time in resolving the said connectivity issues:
 Additional information coming from the company’s human
resource officers stated that they are currently following the
minimum wage rate of the location of the main office, though the
IT staff are currently paid differently. The IT tech assistants are
fifty pesos above the minimum wage, IT tech support are forty-
five pesos above the minimum wage, and the IT tech supervisor
are paid eight hundred forty-five pesos per day, and the IT Tech
Senior are paid one thousand three hundred fifty-pesos per day.
The Director for Operations has also included that during the year the total expenditure of the banking account:
· Team leader’s seminar for leadership amounting to Php155,000.00.
· Quality Control Process Analysis for BPO Leaders amounting to Php55,600.00
· Increasing Agent Efficiency through AI amounting to Php78,500.00
· Internet connection upgrading from 200mbps to 500mbps amounting to Php35,000
· Data center system sweep from external contractors amounting to Php125,000.00
· Improvement of fifty computer unit amounting to Php250,000.00 which replaced computer of older model amounting to
Php115,000.00
· Inspection of the performance of agents by the External Auditors amounted to Php105,000.00
· Meetings funds were found to be at Php75,800.00 annually.
· IT technician bonuses was computed to be at Php278,000.00
· Defective computers parts were found to be at Php25,000.00, which was seen in twenty-nine computer units.
· An external auditor visited the satellite office which has cost the company Php75,000.00, while another auditor visited the
main office which has cost the company Php125,000.00
· Computer repairs made by the IT support amounted to Php234,000.00 for the duration of the year.
· Overtime paid to agents who covered double shifts due to lack of employees during the year amounted to Php145,000.00
· Internet service provider downtime caused the company a total of Php433,000.00
· Payment of penalty fees from the Department of Sanitation for violating the city ordinance of trash segregation amounting to
Php125,000.00
 Another objective to note is that the Director for Operations would also like to take
note that improvements should be seen within the banking account as the owners of
the company is currently in talks with a new client which would open three additional
accounts which would be a beneficial effect for the company.
Furthermore, to incentivize you, who will be analyzing the said operational capabilities
of the plant, the owners is willing to provide payment of around Php245,000.00
provided that the information to be given is both concise and complete.

With the data provided by the Director of Operations, the team is tasked with
the following obligation:
Determine the different costs incurred by the company in terms of: Prevention cost, Appraisal Cost, Internal Failure Cost, and External Failure Cost.
•Prevention Costs:
• Team leader’s seminar for leadership: Php 155,000.00
• Quality Control Process Analysis for BPO Leaders: Php 55,600.00
• Increasing Agent Efficiency through AI: Php 78,500.00
• Internet connection upgrading from 200mbps to 500mbps: Php 35,000.00
•Improvement of fifty computer unit amounting to Php250,000.00 which replaced computer of older model amounting to Php115,000.00 (Improvement of 50 computer
units: Php 250,000.00)
• Meetings funds: Php 75,800.00
• IT technician bonuses: Php 278,000.00

•Appraisal Cost:
Data center system sweep from external contractors: Php 125,000.00
Inspection of the performance of agents by External Auditors: Php 105,000.00
Satellite Office Audit: Php 75,000.00
Main Office Audit: Php 125,000.00
•Internal Failure Costs:
Defective computers: Php 25,000.00
Computer repairs: Php 234,000.00
Overtime due to double shifts: Php 145,000.00
Internet service downtime: Php 433,000.00

•External Failure Costs:

• Penalty for violating trash segregation law: Php 125,000.00

SUMMARY:
Prevention Costs: 927,900
Appraisal Cost: 430,000
Internal Failure Costs: 837,000
External Failure Costs: 125,000
· Determine the cost of quality and explain.
· FORMULA COGQ= AC+PC COPQ=EFC+IFC COQ=COGQ+COPQ
· Solution:
· COGQ= 927,900+430,000= 1,357,900
· COPQ=125,000+837,000=962,000
· COQ=1,357,900+962,000=2,319,900

· Determine what are the cost of good quality and cost of poor quality and provide an explanation as to why one outweighs the other.

The COGQ is 1,357,900, which is higher than the COPQ of 962,000. This shows that the company is investing heavily in ensuring product
quality through prevention and appraisal, which is a good practice.
However, COPQ represents costs incurred when quality is compromised, which can significantly impact the company’s reputation and
profitability. In this case, while the company has high prevention costs, the COPQ is still a substantial portion, showing that poor quality is
affecting the business.
If the COGQ (prevention and appraisal) were increased, it would help reduce the COPQ, leading to a reduction in the losses from failures
and improving overall efficiency and customer satisfaction.
Thus, focusing more on improving prevention costs can reduce the COPQ, making it more cost-effective in the long term.

· Create a process flow chart and process diagram.

1. Create a Process Flow Chart and Process Diagram
A process flow chart and process diagram visualize the steps in a given process, helping identify key elements such as decision points,
tasks, and resource allocations.
Flowchart Process Flow Chart for Banking Operations (Including IT Support)
START

Receive Call/Issue (Banking Account)

Agents receive calls for banking accounts

(Eastern Bank, Apex Bank, SeaBank).

Call/Issue Resolution (Banking Account)

Agents work on resolving the issues. The
time varies for each account.

Eastern Bank: 17 minutes Apex Bank: 10 minutes SeaBank: 14 minutes

IT Support Engagement
Check for Internet Connectivity Issue
IT support staff is notified of the issue (based on shift assignments).
If an internet issue occurs, agents will need to Morning: IT Tech Assistant & IT Tech Support (17 minutes)
wait for resolution. Midday: IT Tech Supervisor & IT Tech Support (11 minutes)
Graveyard: IT Tech Senior & IT Tech Supervisor (7 minutes)

Resolution of Issue (If connectivity issue occurs)

IT staff resolves the issue.

"If not resolved, escalate for further IT support" means that if the initial IT
Issue Resolved? support team (assigned during the current shift) is unable to resolve the
If resolved, return to call/issue resolution.
internet connectivity issue, the problem will be passed on to a higher level
of IT support or a different team that may have more expertise, resources,
or authority to fix the issue.

Call/Issue Completion
Once the issue is resolved, the call or task is
completed.

End of Shift
End of shift for banking agents,
transition to next shift if needed.
Process diagram.
· Compute the capacity of each account assignment using a single and multi-step process.
· The single-step process is quick, with all the information given in one calculation.
· The multi-step process involves breaking the problem into smaller parts and solving each part individually before
combining them for the final result.
·

NRU Eastern Bank (Credit Card) 32 agents + APEX Bank (Debit Card) 48 agents+ SEABANK (Credit Card) 32 agents=
112 agents
PT= 17 minutes+ 10 minutes + 14 minutes= 41
· Single step process
· CAPm=112/41=2.73170x1,320 minutes =3,606 call/day
· multi-step process
CAPm=32/17=1.88235x1,320 minutes=2,485 call/day
CAPm=48/10=4.8x1,320 minutes =6,336 call/day
· CAPm=32/14=2.28571x1,320 minutes =3,017 call/day
· FR={2,485call/day,6,336call/day,3,017 call/day}=2,485 call per day
· Compute the capacity of each of the IT support team using a single and multi-step process.
· Key Difference:
· The single-step process is quick, with all the information given in one calculation.
· The multi-step process involves breaking the problem into smaller parts and solving each part individually before combining them for the final
result.

· NRU=IT Tech Assistant + IT Tech Support +IT Tech Supervisor + IT Tech Support+IT Tech Senior + IT Tech Supervisor =6
· PT=17 minutes+11 minutes+7 minutes= 35 minutes

· Single step process

· CAPh=6/35=0.17142x1,3200minutes=226 issue resolved per shift

· multi-step process
·
· Morning Shift: 8:00 AM to 4:00 PM (8hrs or 480 minutes)
· CAPh=2/17=0.11764x480minutes=56 issue resolved per shift

· Midday Shift: 5:00 PM to 12:00 AM (7hrs or 420 minutes)

· CAPh=2/11=0.18181x420minutes=76 issue resolved per shift

· Graveyard Shift: 1:00 AM to 8:00 AM (7hrs or 420 minutes)

· CAPh=2/7=0.28571x420minutes= 120 issue resolved per shift
· · Determine and provide an explanation as to which resource unit is considered as the bottleneck of the process and
determine if it is in a CC or DC situation.
· · Account Assingment
· FR={2,485,6,336,3,017 call/day}=2,485 call per day
· 32 Agents it has 17 minutes process time and the other process time is 10 minutes and 14 minutes
· IT Staff Assignment
· FR={56,76,120 }=56 task per shift
· IT Tech Assistant & IT Tech Support it has 17 minutes process time and the other process time is 11 minutes and 7 minutes

· Calculate the utilization of each of the account assignments and determine which among them are in maximum capacity and
explain.
· Utilization=FR/CAP=
·2,485/2,485=100 This is capacity constraints The system or account assignment is its maximum capacity.
· 2,485/6,336=39 This is demand capacity the system is only using 39% of its available capacity.
· 2,485/3,017=82 This is demand capacity the demand capacity the system is only using 82% of its available capacity.
· Calculate for the utilization of the IT support team and determine which
among them are in maximum capacity and explain.
· Utilization=FR/CAP=
· 56/56=100 This means its maximum capacity. There is no extra capacity
available
· 56/76=74
· 56/120=47
· Provide an explanation as to how improvements to the bottleneck can be
made to, apply a new calculation for the said increase in capacity and
determine if the said scenario will now fall in a CC or DC situation.

· Reducing process time by 20% or Resource of unit

· Determine the labor content of the process.
· LC=17 minutes + 11 minutes + 7minutes = 35 minutes
· Calculate the cost of direct labor. Also, calculate the cost of direct labor if the shifts are reduced to
two.
· Given:
· Minimun wage of Baguio=400
· IT Tech Assistant=50+400=450 MORNING SHIFT
· IT Tech Support=45+400=445 MORNING SHIFT
· IT Tech Supervisor=845 MIDDAY SHIFT
· IT Tech Support=45+400=445 MIDDAY SHIFT
· IT Tech Senior =1,350 GRAVEYARD SHIFT
· IT Tech Supervisor=845 GRAVEYARD SHIFT
· Consider the idle time of the agents and IT support team and how does it
affect the entire process.
· 17-17= 0
· 17-11=6
· 17-7=10
· As with the initiative of the Director of Operations, determine what will be
the manpower requirement to improve the process and explain.
· TT=AT/RQ At=8hrs+7hrs+7hrs=22 hrs
· TM=LC/TT