Review, analyze, and complete the Chase Manhattan Bank Case Study on page 339 of your textbook. Label your completed file CS1 – Your
Team’s Name (Team A, B, or C) and upload it to Case Study 2 assignment. You do not need to write many words, but you do need to answer all
the three Discussion Questions for the case study at the end of page 339. If you do not address those three questions in particular,
points will be deducted. Question 1 has 50 points, Question 2 has 20 points and Question 3 has 30 points. (LO 1, 2, 4)Upload your file to
Case Study 2 assignment.
Hint: For Question 3, please choose a hypothetical higher number, say 45% or 50%, to illustrate your analysis and conclusion. You also
need to explain why. In some cases, you may use the “QM for Windows” software (rather than Excel QM) to obtain the LP diagram to support
your finding. After solving your LP program, you may click on “Windows” and the select “Graphs” to get to the graph output. You may then
copy and paste any graph into your word document. However, this option may not work in all cases. Please discuss why.
case Study
655% Ménhattan Bank
The workload in many areas of bank operations has the charac-
teristics of a nonuniform distribution with respect to time of day.
For example, at Chase Manhattan Bank in New York, the number
of domestic money transfer requests received from customers, if
plotted against time of day. would appear to have the shape of an
inverted U curve with the peak around 1 PM. For efficient use of
resources, the personnel available should, therefore, vary corre-
spondingly. Figure 8.2 shows a typical workload curve and corre-
sponding personnel requirements at different hours of the day.
A variable capacity can be achieved effectively by employ-
ing part-time personnel. Because part-timers are not entitled to
all the fringe benefits, they are often more economical than full-
time employees. Other considerations, however, may limit the
extent to which part-time people can be hired in a given depart-
ment. The problem is to find an optimum workforce schedule
that would meet personnel requirements at any given time and
also be economical.
Some of the factors affecting personnel assignment are
listed here:
1. By corporate policy, part-time personnel hours are limited to
a maximum of 40% of the day’s total requirement.
2. Full-time employees work for 8 hours (1 hour for lunch
included) per day. Thus, a full-timer’s productive time is 35
hours per week.
3. Part-timers work for at least 4 hours per day but less than 8
hours and are not allowed a lunch break.
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 RM.
5. The shift starts at 9 AA“. and ends at 7 PM. (i.e., overtime is
limited to 2 hours). Any work left over at 7 RM. is considered
holdover for the next day.
6. A full-time employee is not allowed to work more than
5 hours overtime per week. He or she is paid at the normal
rate for overtime hours-not at one-and-a-half times the nor-
mal rate applicable to hours in excess of 40 per week. Fringe
benefits are not applied to overtime hours.
In addition, the following costs are pertinent:
l. The average cost per full-time personnel hour (fringe benefits
included) is $10.11.
2. The average cost per overtime personnel hour for full-timers
(straight rate excluding fringe benefits) is $8.08.
3. The average cost per part-time personnel hour is $7.82.
The personnel hours required, by hour of day, are given in
Table 8.9.
The bank’s goal is to achieve the minimum possible per-
sonnel cost subject to meeting Ur exceeding the hourly work-
force requirements as well as the cdfiStraints 6n the wurkers “mm-~-
listed earlier.
DIscusslon Questions
1. What is the minimum-cost schedule for the bank?
2. What are the limitations of the model used to answer
question 1?
3. Costs might be reduced by relaxing the constraint that no
more than 40% of the day’s requirement be met by part-
timers. Would changing the 40% to a higher value signifi-
cantly reduce costs?
Source: Adapted from Shyam L. Moondra. “An L. P. Model for Work Force
Scheduling for Banks,” Journal of Bank Research (Winter 1976): 299-301.
TABLE 8.9 Workforce Requirements
NUMBER OF PERSONNEL
TIME PERIOD REQUIRED
9-10 AM. 14
10-] l 25
11-12 26
12-1 PM. 38
1-2 55
2-3 60
3-4 51
4-5 29
5-6 14
6-7 9