Mini-case: State Automobile License Renewals [1]

Henry Coupe, manager of a metropolitan branch office of the state department of motor vehicles, attempted to perform an analysis of the driver's license renewal operations. Several steps were to be performed in the process. After examining the license renewal process, he identified the steps and associated times required to perform each step as shown in the table below.

Coupe found that each step was assigned to a different person. Each application was a separate process in the sequence shown the table.   Coupe determined that his office should be prepared to accommodate the maximum demand of processing 120 renewal applicants per hour. He observed that the work was unevenly divided among the clerks, and that the clerk who was responsible for checking violations tended to shortcut her task to keep up with the other clerks. Long lines built up during the maximum demand periods.

Coupe also found that general clerks who were each paid $16.00 per hour handled jobs 1, 2, 3, and 4. Job 5 was by a photographer paid $19.00 per hour. Job 6, the issuing of temporary licenses, was required by state policy to be handled by a uniformed motor vehicle officer. Officers were paid $22 per hour, but they could be assigned to any job.

A review of the jobs indicated that job 1, reviewing the application for correctness, had to be performed before any other step could be taken. Similarly, job 6, issuing the temporary license, could not be performed until all the other steps were completed. The branch offices were charged $10 per hour for each camera to perform photography.

Henry Coupe was under severe pressure to increase productivity and reduce costs, but the regional director of the Department of Motor Vehicles also told him that he had better accommodate the demand for renewals. Otherwise, "heads would roll."

Questions

1. What is the maximum number of applications per hour that can be handled by the present configuration of the process?

2. Suppose the manager is given a budget to hire one more clerk. To which of the six tasks shown in Table 1 below should the new clerk be assigned and how many applications can be processed per hour with the addition of the second clerk?

3. (a) Show how the line should be reconfigured to accommodate 120 applications per hour at the minimum possible cost?

3. (b) How many workers will be required and what will be the total labor cost per hour of your modified process?