FORECASTING MODEL SAVES L.L. BEAN $300,000 IN LABOR ANNUALLY Operations Management Assignment Help

FORECASTING MODEL SAVES L.L. BEAN $300,000 IN LABOR ANNUALLY

L.l. Bean, the outdoor mail-order company located in Free port, Maine, depends on customer telephone orders for 72 percent of its business. Scheduling telephone operators at its call centers is therefore a critical element in its success. Having too few operators results in long customer waiting times and the real possibility of losing ·customers to competitors. On the other hand, having too many telephone operators results in unnecessary labor costs, which impacts negatively on profits. The key to scheduling the proper number of operators to be on duty at any given time depends on the ability to accurately-to recast
the number and type of customer calls that will occur in a given time period. Using a time-series forecasting, model developed by professors at the University of Southern Maine, L.L. Bean has been able to save approximately $300,000 annually in labor costs by scheduling their operators more efficiently. This has been done without incurring any decrease in service quality!

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