Scenario: Constant Cable Company Scheduling And Dispatching

Scenarioconstant Cable Company Scheduling And Dispatching System Econo

Scenarioconstant Cable Company Scheduling And Dispatching System Economic Feasibility Analysis 4 Constant Cable Company has been in business since 2002. When they started the demand for Internet access in residential homes was minimal; the majority of home owners obtained their Internet access through dial-up modems or through their telephone providers. Even though the combined availability in the United States was estimated to be almost 85 percent, only 12 percent of those households had chosen to subscribe. CCC was able to keep up with the demand for cable installation, maintenance and repair with one full-time technician, one part-time installer and a simple scheduling application. By the end of 2004, new technologies and infrastructure were emerging – available to both cable companies and telephone companies.

By early 2005 the penetration of broadband had improved to the point where around half of residential users accessed the Internet via broadband. Although CCC was able to fulfill orders they were unable to deliver the quality of service they desired in a timely manner. Service calls were taking more than a day to be resolved; new installs were in the queue for too many days and customers were complaining. Service requests were handled in the order they were received. This often resulted in the service van being in the same neighborhood three or four different times in a single day.

CCC management senses the need is imminent. The current scheduling and dispatch system cannot adequately handle the number of calls in an efficient manner and must be replaced. You have been hired to perform an economic feasibility analysis for the creation of a new scheduling and dispatching system that CCC is considering. Your findings will be presented to CCC’s Board of Directors for approval. Meetings with various departments such as customer service, logistics, IT and accounting identified several tangible benefits and costs.

The new custom order scheduling and dispatch system will save the company money by decreasing the amount of fuel consumed, reducing the fleet maintenance and rework costs and by increasing savings from greater efficiency from the dispatchers, technicians and the CRM application. Table 1 summarizes these anticipated benefits and their respective savings from implementing the new system: Table 1: Anticipated Yearly Benefits Benefit Savings Fuel Savings $59,400 Increased technician efficiency $336,000 Improved inventory control $64,500 Fleet maintenance cost reduction $4,480 Rework reduction $160,000 Dispatch savings $140,000 CRM Savings $64,000 The proposed custom order scheduling and dispatch system will incur both one-time and recurring costs. The one-time costs for this project currently include implementation consultants, customization, additions to the technical infrastructure, mobile hardware purchases, software licensing and training for new technicians and dispatchers. These costs are summarized in Table 2. Table 2: One-Time Costs Item Cost Implementation Consultants $345,000 Customization $289,000 Technical Infrastructure $33,000 Software License $256,000 Mobile Hardware $64,000 Training new technicians $60,000 Training new dispatchers $18,000 The recurring maintenance costs include communication, annual software license fees, mobile hardware replacement, ongoing training, hosting fees and salaries for one business analyst (BA) and one developer (Dev). These are summarized in Table 3: Table 3: Yearly Recurring Costs Item Cost Mobile Communication $23,040 Software License $64,000 Mobile Hardware Replacement $12,000 Training new technicians $18,750 Training new dispatchers $4,500 Hosting Fees $68,000 IT Staff (1 BA, 1 Dev) $196,000 Deliverables include creating an Excel workbook with worksheets for Anticipated Yearly Benefits, One-Time Costs, Yearly Recurring Costs, and an Economic Feasibility Summary. The feasibility analysis involves discounting future benefits and costs at a 10% rate, calculating their present values, and determining Net Present Values (NPV), Internal Rate of Return (IRR), and break-even points. Additionally, various scenario analyses will be performed to assess impacts of increased or decreased costs and efficiencies. A chart will be created to visualize benefits versus costs over time, and comparisons among different scenarios and proposed projects will be documented to guide management decisions.