Mini Case - answer the questions at the end of the case below

Tri-Metro Investments: Forecasting Help Desk Demand by Day

"Hello, is this the Investment Management Help Desk?" said a tired voice on the other end of the telephone line at 7:42 am. "Yes, how can I help you?" said Thomas Bourbon, customer service representative (CSR). "I've got a problem. My best customer, with investment assets of over $10 million in our bank, received her monthly trust account statement. She says we computed the market value of one of her stocks inaccurately by using the wrong share price, which makes her statement $42,000 too low.

I assured her we would research the problem and get back to her by the end of the day. Also, do you realize that I waited over four minutes before you answered my call?" said the trust administrator, Claire Woodworth. "Ms. Woodworth, give me the customer's account number and the stock in question, and I will get back to you within an hour. Let's solve the customer's problem first. I apologize for the long wait," said Bourbon in a positive and reassuring voice.

The Help Desk supports fiduciary operations activities worldwide by answering questions from company employees, such as portfolio managers, stock traders, backroom company process managers, branch bank managers, accountants, and trust account administrators. These internal customers originate over 98 percent of the volume of Help Desk inquiries. Over 50 different internal processes and organizational units call the Help Desk. Some external customers such as large estate trust administrators are tied directly to their accounts via the Internet and occasionally call the Help Desk directly.

The Help Desk is the primary customer contact unit within fiduciary operations, employing 14 full-time customer service representatives (CSRs), three CSR support employees, and three managers, for a total of 20 people. The three CSR support employees work full-time on research in support of the CSRs answering the telephone.

The Help Desk handles about 2,000 calls a week and the pressure to reduce unit cost is ongoing. Forecast accuracy is a key input to better staffing decisions that minimize costs and maximize service. The accompanying table shows the number of calls per day (Call Volume).

The senior manager of the Help Desk, Dot Gifford, established a team to try to evaluate short-term forecasting. The Help Desk Staffing Team consists of Gifford, Bourdon, Woodworth, and a new employee Gail Hamlet, who has an undergraduate degree in business management from Mount Saint Vincent University. This four-person team is charged with developing a long term forecasting procedure for the Help Desk. Gifford asked the team to make an informal presentation of their analysis in 10 days. The primary job of analysis has fallen on Hamlet, the newly hired operations analyst. It is her chance to make good impression on her boss and colleagues.

In trying to develop a longer-term forecasting procedure for their short-term forecasting, it is important to analyze qualitative information before rushing to calculate quantitative methods. Hamlet asks the team the following questions:

1. Using the data on call volume below, how would you forecast short-term demand? Show three methods:

a) the average;

b) a 2 period moving- for all 16 days - show your graph for the 2 period moving average; and

c) exponential smoothing using a constant of 0.3.