MBAA607- Dr. Leon
Project 1: Chase Manhattan Bank
The workload in many areas of bank operations has the characteristic of being
unevenly distributed throughout the day. For example, at Chase Manhattan Bank in New
York, the number of domestic money transfer requests received from customers, if
plotted against the time of day, would appear according to the workload described in
Figure 1 below. For efficient use of resources, the personnel available should therefore
vary correspondingly.
25
20
15
Money Transfer Requests
10
5
0
9:00 AM
10:00
AM
11:00
AM
12:00
PM
1:00 PM 2:00 PM 3:00 PM 4:00 PM 5:00 PM 6:00 PM
Figure 1: A typical workload curve that describes the
corresponding personnel requirements at different hours of the day.
A variable capacity can be achieved effectively by employing part-time personnel
in conjunction with full-time personnel. Because part-timers are not entitled to all the
fringe benefits, they are often more economical than full-time employees. Other
considerations such as consistency and quality control 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 will meet personnel requirements at any given time and
also be economical.
Some of the factors affecting personnel assignment for the Chase Manhattan Bank
that you are modeling are as follows:
1. Corporate policy mandates that part-time personnel hours are limited to a
maximum of 40% of the day’s total requirements.
2. Full-time employees start at 9:00 A.M. and work for 8 hours with one hour for
lunch per day. Thus a full-timer’s productive time is 35 hours per week. They
are not paid during their lunch break.
3. Part-timers work for at least 4 hours per day but no more than 6 hours and are not
allowed a lunch break. A part-timer may start his/her shift anytime between 9:00
A.M. and 3:00 P.M.
4. 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.
5. The bank operates from 9 A.M. to 7 P.M. Any work left over at 7 P.M. is
considered holdover for the next day.
6. A full-time employee is allowed to work up to 2 hours of overtime per day, but
the total overtime hours worked may not exceed more than 5 hours per week per
employee. Overtime is worked between the hours of 5:00 P.M. and 7:00 P.M.
The employee is paid at the normal rate of $10.85 for overtime hours (not at time
and a half). Fringe benefits are not applied to overtime hours. When the fringe
benefits are applied to the employee’s 35 hour work week, the average cost per
full-time personnel hour is $12.40.
7. Part-time personnel are paid $8.80 per hour.
8. The personnel hours required, by hour of the day, are given in Table 1 below.
The bank’s goal is to achieve the minimum possible personnel cost subject to meeting or
exceeding the hourly workforce requirements as well as the constraints on the workers
listed.
Time Period
Number of Personnel Required
9-10 A.M.
14
10-11 A.M.
25
11-12
26
12-1 P.M.
38
1-2
55
2-3
60
3-4
51
4-5
29
5-6
14
6-7
9
Table 1: Workforce Requirements
Your Assignment is the following:
1. Create a spreadsheet model that can be used to test any possible daily workforce
schedule that the bank may wish to consider. Refer to the labor scheduling model
presented in class for template layout ideas. Interpret the 5 hour weekly overtime
limit per full-time employee as follows: the total number of overtime hours
utilized per day should not exceed the number of full-time employees working. In
this situation, each full-timer will not work more than one hour of overtime on
average per day.
2. Optimize your spreadsheet model by filling in the solver dialog box with the
appropriate set of constraints, changing cells and target cell.
3. In class, turn in a one page hardcopy executive summary along with as many
table/graph attachments as you like that describes:
a. The recommended daily personnel schedule for Chase Manhattan Bank
along with the projected costs using the guidelines and information
described earlier.
b. A managerial analysis of the qualitative benefits and drawbacks of the
schedule you are recommending. This should include any concerns that
you might have about the schedule you identified due to limitations of the
model you developed as well as the nature of the solution identified.
c. Your analysis of two suggestions that a manager at the bank recently
proposed:
i. The corporate policy should be modified to allow part-time
personnel hours to be limited to a maximum of 50% of the day’s
total requirement. The manager feels that this will save the bank
money and not hurt the quality of service provided. You should
modify your model to see if you agree with his cost assessment.
ii. Allow some of the full-timers to start their 8 hour shifts at 10:00
A.M. and 11:00 A.M. Overtime is utilized after a full-timer
finishes working a 8 hour shift (including lunch). Lunches would
now be taken after a full-timer works 3 hours of their shift. Thus
all employees that start at 9:00 A.M. would now take their lunch
break at noon, whereas employees that start at 10:00 A.M. would
take their lunch break at 1:00 P.M. The manager feels that this
new flexibility would allow the bank to save money and have the
part-timers more evenly distributed throughout the day. Modify
your model to see if you think this option has any potential.
Consider this suggestion independently of the first suggestion.
4. In the same file, save your original model on one worksheet, the model that
examines the PartTime suggestion in a second worksheet and the model that
examines alternate Full Time shifts in a third worksheet. Submit your optimized
models in MyLMUConnect’s Assignment section for project 1.
MODEL GRADE BREAKDOWN:
MODEL
Points Worth
Original
60
Part-Timer Modification (part C.i.)
5
Full-Timer Modification (part C.ii)
12
Points Earned
EXECUTIVE SUMMARY GRADESHEET:
Content
Points Worth
Clear recommendation of daily
personnel schedule and costs
4
Managerial analysis of benefits and
drawbacks of schedule
recommendation
4
Analysis of the potential merit of the
part-time requirement suggestion
3
Analysis of the potential merit of the
full-timer shift suggestion
3
Summary addressed to appropriate
audience (Manager at Chase
Manhattan Bank)
3
Organization of Content
3
Spelling, grammar, clarity of writing
3
Points Earned
Please note that your executive summary should not make any direct reference to your
spreadsheet model. You should interpret the results and what you learned without
referring to cells, formulas and constraints. Assume that the bank manager will not see
your spreadsheet model!