TDABC; Continuation of Problem 5-64 Suppose that in addition to the call center engagement outlined

TDABC; Continuation of Problem 5-64

Suppose that in addition to the call center engagement outlined above, AS also provides the following annual service to 10 other clients:

Total Calls Answered

Average Number of Minutes/Call

Platinum Regional Bank

234,000

6.0

Healthwise Software Inc

66,788

5.0

Johnson Manufacturing

122,665

4.0

Lesco Online Shopping

233,756

6.0

Babcock Insurance Service

55,455

5.5

Garcia Electric Supply and Service

38,956

3.4

Gilbert’s Online Garden Supplies

145,902

4.0

Financial Planning Services Inc

68,993

11.0

Porter’s Camera and Optical

198,440

6.0

Required

What is the unused capacity at MSI, not assuming that AS becomes a customer? What are the implica- tions for the operating and marketing strategies at AS?

Assume that AS comes back to MSI with a revised proposal. The revised proposal includes call center activity as described in problem 5-64, but in addition, AS wants MSI to provide error-checking services for those who apply for loans at AS. MSI would use some of the call center staff, after appropriate train- ing, to complete the processing of the credit checks. AS expects the following service to be needed:

Processing Credit Checks

Auto Requests

45,600 Min./request

10

Truck

12,500

18

What would be the unused capacity with the revised proposal? What would be the cost of the unused capacity?