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ASSIGNMENT 1
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BUSINESS ANALYSIS AND DECISION MAKING

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
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MUKUL SETHI -632244
DIVYA GUPTA – 724894
ALEXANDRA PITSAS – 748975


HE ZHU- 648868
PIRADA P. - 684284


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



Table of Contents

1. Introduction .......................................................................................................................... 3

1.1 Methodology ...................................................................................................................... 4

1.2 Evaluative Criteria .......................................................................................................... 4

2. Literature Review .............................................................................................................. 5

3. Strengths Of The Optimization Models ................................................................... 6

4. Weaknesses Of The Optimization Models ............................................................. 8

5. Suggestions For The Future Research ..................................................................... 9

6. Conclusion ........................................................................................................................... 10

Appendix ................................................................................................................................... 12
1. Introduction

Optus is Australia’s second largest telecommunications company, providing a

wide range of services to over 10 million customers each day (Singtel 2015, p.22).

Optus is a wholly-owned subsidiary of the Singtel Group, which has operations in

more than 20 countries globally (‘yes’ Optus 2013, p.4). Like many

telecommunications companies, Optus endeavors to provide its customers with an

industry leading customer service experience in an effort to differentiate itself

from its competitors (‘yes’ Optus 2010, p.2). However, this can be a challenging

goal to achieve, particularly within its call center.

The problem of staff optimization in call centers whilst minimizing personnel

costs and maintaining service quality is an important issue to address, as it is

estimated that $300 billion is spent on call centres globally and approximately

80% of a company’s call centre costs are personnel costs (Bhulai, Koole & Pot

2008; Mandelbaum & Zeltyn 2009). Thus, by reducing this labor cost by just a

few percent by designing and applying a new personnel schedule could be a

significantly beneficial strategy for Optus (Van den Bergh, Belien,

Demeulemeester & De Boeck 2013). Therefore, Optus could significantly benefit

from using integer programming (IP), a technique which uses mathematical

modeling to determine the optimal scheduling of their staff to reduce wait times

and minimize costs.

Specifically, the IP problem faced by Optus is to identify the number of staff

required during different periods of the day to meet customer demand, thus
reducing average wait times, enhancing customer experience and minimizing

costs. The decision variables that need to be considered in this problem include the

amount of employees working in various specializations (for example sales,

technical support, billing) during different time periods.

The constraints include customer waiting time (limiting to an average of 1-2

minutes), hourly wages for different skilled staff, the maximum office capacity,

and the minimum amount of staff needed during peak and off peak times.

1.1 Methodology

To gain an overall understanding of the optimization problem Optus is

encountering, an analysis of the relevant literature which applied mathematical

modeling to solve similar staffing optimization problems within

telecommunications call centers was conducted. To research our selected problem

and collect 10 international journal articles, we used the online sources Scopus,

IEEE Explore Digital Library, Informs Pubs Online, and Science Direct by typing

in keywords such as optimization, staff scheduling, call centers,

telecommunications industry, LP and IP.

1.2 Evaluative Criteria

The evaluative criteria specifically used to analyze the strengths and weaknesses

of the mathematical models used in the 10 journal articles were based around the

constraints faced by call centers like Optus. These constraints were examined in

each article and included, the average customer wait time, multi-skilled staff, the
number of staff required for specific shift times to meet customer demand, and the

hourly wage for each shift and skill group.

2. Literature Review

Recently call centers have grown rapidly and have become an integral part of

today’s major organisations, as they are used as a primary channel to provide

quick support services to customers (Seada & Eltawil 2015). Therefore, call

centers need to ensure they have an accurate match of customer demand and staff

supply during different periods of the day (Madelbaum & Zeltyn 2009).

Understaffing call centers typically results in longer wait times for customers,

leading to frustration and a poorer customer experience, with research reporting

that 63% of Australian customers have ended business with a company after a bad

call center experience (Bhulai et al. 2008, p.411; ‘yes’ Optus 2013, p.18).

Therefore, it would be beneficial for call centers to address such staff scheduling

optimization problems by calculating the optimal solution through the use of

mathematical models and algorithms (Bhulai et al. 2008).

The literature analyzed in this report offers a variety of mathematical models and

algorithms, such as linear and integer programming, cutting plane methodology,

improved adaptive genetic algorithm (IAGA), deterministic fluid model, and

Gaussian linear mixed model calculations. These models and algorithms were used

by researchers to generate the optimal solution of staff scheduling optimization

problems faced by call centers within the telecommunications industry. The

majority of the research considers constraints such as customer waiting time (not

exceeding 20 seconds), call abandonment, uncertain arrival rates, forecasting

demand, multi-skill call centers and staffing costs. Notably, however, research by

Bhandari, Scheller-Wolf and Harchol-Balter (2005), Ertogral and Bamuqabel

(2008) and Cheng and Huo (2011) considered the potential possibility of

employing permanent and casual staff, in which the permanent staff are always

available to work, while the casual staff only work when the call center is busy,

thus minimizing the costs associated with increased staff scheduling. Overall, the

research analyzed has demonstrated that LP and IP have successfully been applied

to determine the optimal number of staff required to satisfy customer demand

during different periods of the day in an effort to minimize personnel costs, whilst

also maintaining service quality. Refer to appendix 1 for a summary of each

article.

3. Strengths Of The Optimization Models

Although call centers seem peripheral in most organizational operations, they are

extremely crucial in retaining customers. As mentioned by Brigandi et al (1994),

overstaffing could lead to unnecessary costs whilst understaffing could result in

dissatisfied customers and loss of future business or revenue. With the aim to

reduce costs while maintaining a good level of customer service, numerous studies

have been published on staffing optimization in contact centers. Many of which

are highly relevant to the staffing issue at Optus call centers.

Bhulai, Koole and Pot (2008) approach the staffing optimization problem with a

simple linear programming model, resulting in a quick computation time, which

could be useful in a fast paced environment. However, the key strength of this

model is that it considers the multiple skill sets call center personnel can have,
which is similar to that of the work of Cezik & L’Ecuyer (2008), Schrieck,

Chevalier & Aksin (2011), and Ertogral & Bamuqabel (2008). The mathematical

models that support multiskilling staff are very practical and could be adapted to

solve Optus staffing problem as Optus call center supports multiple areas of

business such as sales, billing, technical support, and so on, which will require

different types of expertise to effectively support the customers.

Accordingly, the aforementioned papers take the costs of individuals with varying

skillsets into consideration. That is, the cost of staff is not in one single rate but

differs based on the amount of skills an individual has. This differing staff cost

creates a more realistic model of staff remuneration. Comparably, while Bhandari,

Wolf & Balter (2005) and Cheng & Huo (2011) do not build their models based on

multi-skill call center, they consider the different wages in different working shift,

which is highly applicable to Australian penalty rates for employees working in

certain days and hours.

One strong aspect of the models presented by Cheng & Huo (2011) and Noiman,

Feigin & Mandelbaum (2009) is that they use inhomogeneous Poisson process

arrival rate to realistically forecast call center staff’s workload that is not constant

throughout the day. The latter model assumes that the arrival rate remains constant

in every 30-minute interval to simulate real life uncertain rate of calls received and

queued by the call Centre in each shift.

The detailed real world constraints are also presented in multiple models and add

value to solving staffing optimization problems. The model by Ma & Liu (2012)

applies rigorous business rules such as the number of working hours and resting

hours per week, which can be adapted to workplace rules and regulations at Optus
when scheduling staff. Additionally, Mandelbaum & Zeltyn (2006), Cezik &

L’Ecuyer (2008), Cheng & Huo (2011), and Baron & Milner (2009) consider the

fact that customers may abandon the call after a certain period of waiting time.

Lastly, in addition to staff wage, Bhandari, Wolf & Balter (2005) and Baron &

Milner (2009) both include penalty cost as a service level constraint on service

delays when forming staffing optimization models to reflect real world cost to the

service quality.

4. Weaknesses Of The Optimization Models

According to the evaluation criteria and the relevance to Optus call center case, the

articles are also thoroughly assessed to identify the weakness.

An essential constraint in Optus call center case is the varying wages for staff with

varying skills. In their articles, Mandelbaum and Zeltyn (2006), Ma and Liu

(2012), Baron and Milner (2009) and Noiman, Feigin and Mandelbaum (2009)

have not taken the multi-skills staff into consideration when they build the model

to solve the problem. Both varying wage and multi-skill of staff are not discussed

in their articles, which limits the relevance to Optus call center case.

Another common issue is that the performance analysis is not comprehensively

conducted in most articles. Although arrival rates are considered in most articles as

a key constraint to conduct staff scheduling, Bhulai, Koole and Pot (2008),

Mandelbaum and Zeltyn (2006) and Baron and Milner (2009) have not considered

uncertain arrival rates and simplify the arrival rates as constant during each one
hour period. Furthermore, in the articles by Bhulai, Koole and Pot (2008),

Bhandari, Wolf and Balter (2005), and Ma and Liu (2012), the fact of customer

waiting time is not included, while it is a critical constraint to ensure a relatively

high customer satisfaction in Optus call center case. Then, another fact of potential

call abandonment resulted by lengthy waiting time is also not considered in these

articles.

In addition, in Mandelbaum and Zeltyn’s (2006) article, cost minimization is not

discussed, although the main objective of optimizing the number of staff could

essentially lead to that. Similarly, Baron and Milner (2009) focus more on

maximizing profit rather than minimizing cost, as the call center in Optus is

actually a cost center.

Finally, three more common issues are identified. None of the ten articles have

considered the length of each service session or average length, which is also an

essential constraint to schedule staff. Sensitivity report is also not elaborately

discussed in each article, and the scope is normally limited and simplistic for a

real-world problem. These need to be addressed in Optus call center case.

5. Suggestions For The Future Research

Having examined a number of articles for the Optus call centre problem, one of

the recurring limitations was that some of the main constraints were not

simultaneously considered related to Linear Programming (LP) Model. These

were abandonment rate, uncertain arrival rate, queuing, staff cost, customer-

waiting time. Thus, it is suggested that a LP model considering all these

constraints simultaneously to be assembled and thus providing an optimal solution

to Optus.

Furthermore, since call centres might be outsourced, then Optus should

continuously audit performance analysis, sensitivity analysis to maximize the

expected profit for the Service Level Agreements (Baron & Milner 2009).

Additionally, one of the main aspects that was apparent in many articles (Bhulai,

Koole and Pot 2008; Ertogral & Bamuqabel 2008) is regarding the multi-skill

group to be involved in Optus call centre. Thus, including multi-skill groups will

help customers to choose the right service according to the needs which will

eventually help Optus to make more customer friendly environment.

6. Conclusion

As discussed above the paper presented has tried to cover the strengths and

weaknesses of all the articles presented and tried to relate it to the problems that

Optus faces. On the basis of the presented papers and their relation with Optus’s

problem, a following report will suggest the solution for the same.
REFERENCES

Aldor-Noiman, S, Feigin, PD & Mandelbaum, A 2009, ‘Workload forecasting for a call

center: Methodology and a case study’, The Annals of Applied Statistics, vol. 3, no.4, pp.
1403-1447.

Baron, O & Milner, J 2009, ‘Staffing to maximize profit for call centers with alternate
service-level agreements’, Operations Research, vol. 57, no.3, pp. 685-700.

Bhandari, A, Scheller-Wolf, A & Harchol-Balter, M 2005, ‘An exact and efficient algorithm
for the constrained dynamic operator staffing problem for call centers’, viewed 10 August
2015,
<http://www.cs.cmu.edu/~harchol/Papers/dynamic-staffing.pdf>.

Bhulai, S, Koole, G & Pot, A 2008, ‘Simple methods for shift scheduling in multiskill call
centers’, Manufacturing & Service Operations Management, vol. 10, no.3, pp. 411-420.

Brigandi, AJ, Dargon, DR, Sheehan, MJ & Spencer III, T 1994, ‘AT&T’s call processing
simulator (CAPS) operational design for inbound call centers’, Interfaces vol. 24, no.1, pp.
6–28.

Cezik, MT & L’Ecuyer, P 2008, ‘Staffing multiskill call centers via linear programming and
simulation’, Management Science, vol. 54, no.2, pp. 310-323.

Cheng, F & Huo, J 2011, ‘Dynamic operator staffing problem for call centers with
uncertain arrival rates’, 2011 International Conference on Business Computing and Global
Information (BCGIN), Shanghai, China, 29-31 July 2011, viewed 13 August 2015,
<http://ieeexplore.ieee.org.ezp.lib.unimelb.edu.au/stamp/stamp.jsp?tp=&arnumber=60039
75>.

Ertogral, K & Bamuqabel, B 2008, ‘Developing staff schedules for a bilingual

telecommunication call center with flexible workers’, Computers & Industrial Engineering,
vol. 54, no.1, pp. 118-127.

Ma, Y & Liu, L 2012, ‘Solving call center agent scheduling problem through improved
adaptive genetic algorithm’, 2012 Fifth International Symposium on Computational
Intelligence and Design (ISCID), Beijing, China, 28-29 October 2012, viewed 12 August
2015,
<http://ieeexplore.ieee.org.ezp.lib.unimelb.edu.au/stamp/stamp.jsp?tp=&arnumber=64055
57>.
Mandelbaum, A & Zeltyn, S 2009, ‘Staffing many-server queues with impatient customers:
constraint satisfaction in call centers’, Operations Research, vol. 57, no.5, pp. 1189-1205.

Seada, AA & Eltawil, AB 2015, ‘Modeling and analysis of workforce management

decisions in modern call centers’, Proceedings of the 2015 International Conference on
Industrial Engineering and Operations Management (IEOM), Dubai, United Arab Emirates
(UAB), 3-5 March 2015, viewed 20 August 2015,
<http://ieeexplore.ieee.org.ezp.lib.unimelb.edu.au/stamp/stamp.jsp?tp=&arnumber=70937
61>.

Singtel 2015, Annual Report 2015, Singapore Telecommunications Limited, viewed 20

August 2015,
<https://media.optus.com.au/wp-content/uploads/2015/07/Singtel-Annual-Report-
2015.pdf>.
Van den Bergh, J, Belien, J, De Bruecker, P, Demeulemeester, E, & De Boeck, L 2013,
‘Invited review: Personnel scheduling: A literature review’, European Journal of
Operational Research, vol. 226, no.3, pp. 367-385.
Van den Schrieck, J, Aksin, Z & Chevalier, P 2014, ‘Peakedness-based staffing for call
center outsourcing’, Production and Operations Management, vol. 23, no.3, pp. 504-524.

‘yes’ Optus 2010, Optus submission to Australian Communications and Media Authority
public enquiry: Reconnecting the customer, viewed 20 August 2015,
<http://www.acma.gov.au/webwr/_assets/main/lib311946/public_inquiry_submission_121-
optus_21-09-10.pdf>

‘yes’ Optus 2013, Customer Service: Perceptions and Expectations: A report by Optus,
viewed 21 August 2015,
<https://www.optus.com.au/dafiles/OCA/AboutOptus/MediaCentre/SharedStaticFiles/Shar
edDocuments/CustomerExpectationsReport.pdf>.

‘yes’ Optus 2013, Sustainability Report 2013, viewed 20 August 2015,

<http://www.optus.com.au/opfiles/Aboutoptus/Assets/StaticFiles/PDF/Sustainability_2013.
pdf>.

Appendix

Journals Description Strengths Weaknesses

Simple Methods This paper The model is simple and The model
for Shift introduces an easy to implement, determines staffing
Scheduling in integer- which makes calculation levels and
Multiskill Call programming possible in seconds. generates shifts
Centers model for shift separately in two
scheduling in multi steps, which could
skill call centers. result in sub
The objective of Consider differences in optimality/inefficie
the model is to constraints such as call ncy
minimize personnel types, skill groups, time
costs, while period, shift types (diff Low complexity:
meeting the pay in diff shift) doesn’t consider
staffing abandon calls,
requirements for return calls,
each group in each queuing, arrival
The model allows agents
period. rates, average wait
to work in different
groups during the same
 shift time, etc.)

An Exact and The paper Model allows a call No consideration

Efficient Algorithm discusses about center to have both on varying wages
for the Constrained having permanent permanent and temporary in different shifts,
Dynamic Operator and temporary operators to avoid waiting time,
Staffing Problem operators with staffing inefficiency and abandon calls,
for Call Centers service constraints considers the difference queuing
like onetime costs in wages
Does not consider
Service level constraints multi skilled staff
such as the one-time cost
incurred if a customer
experiences positive
delay, and the
opportunity cost per unit
time, incurred for each
customer waiting in
queue are included

Consider arrival rates

Does not consider
Staffing Many- This paper focuses Focuses on satisfying uncertain arrival
Server Queues with on optimal staffing specific constraints that rates.
Impatient of many server- are set in call centers by
Customers: queues that management (i.e. tight Assumes constant
Constraint experience performance constraints, arrival rates during
Satisfaction in Call abandonment of assigned revenues to each one hour
Centers calls due to service completions, and period.
impatient costs to delays such as
customers. It wait time and Does not consider
applies a number of abandonment). multi-skill call
mathematical centers.
operational regimes
and linear Assumes staffing
programming to Applies queuing theory. costs are equal at
solve the optimal all intervals.
staffing problem Considers average wait
while also time and customer’s
satisfying patience time (typical
constraints such as mean patience time is
approximately 5-10 Does not consider
a 20 second waiting cost minimization
time. minutes).
(although
essentially, it could
lead to cost
Considers constraint minimization, the
satisfaction in a single paper focuses on
time interval (e.g. one optimizing the
 hour) and over a full day number of staff)
(24 hours) with several
time intervals.

Suggests offering
arriving customers with
an estimated waiting
time

Solving Call Center This paper uses Focuses on minimising

Agent Scheduling improved adaptive the gap between demand Does not consider
Problem through genetic algorithm forecast and actual multi-skilled staff
Improved Adaptive (IAGA) to solve workload in each shift. and staff costs.
Genetic Algorithm the scheduling
problem of a 24 Traffic is estimated Performance
hour call center of every 30 minutes and constraints are not
a major personnel demand is addressed -
telecommunication calculated every 30 customer waiting
s company in minutes to determine the time and call
China. The number of staff required abandonment is not
objective of this for a particular shift. considered.
study is to
minimize the Considers the type of Emphasis on
difference between shift (i.e. morning, forecasting demand
demand forecast middle, night) and hours to determine
and the actual of work per shift. staffing
workload in each requirements per
time period to shift - could be a
ensure accurate little complex.
staff scheduling,
thus avoiding
understaffing
(increases wait Model by team, not
times) or individual
overstaffing (individuals in the
(unnecessary team always work
costs). This paper tgt/on holiday tgt)
uses IAGA to
obtain the optimal Costs for each shift
solution of the staff and skill group are
scheduling constant
problem.

Staffing Multiskill This paper is based The solution provided is Although the
Call Centers via around optimizing optimal in case of large solution is optimal
Linear the staffing problem instances. as discussed in the
Programming and problem at a paper, but is not the
Simulation multiskill call best solution
center while always. But still is
minimizing the Improves the satisfaction a better result than
operating costs. as the call goes to the diverting the call
The paper uses concerned authority. randomly to
cutting plane anyone.
methodology of It also minimizes
Atlason et al. operating costs. This may increase
(2004) to solve this the wait time.
problem

Dynamic Operator This paper talks Uses the concept of Do not consider the
Staffing Problem about how to Flexible staffing i.e. the adjustment cost of
for Call Centers maximize profit ability to dynamically call center
with Uncertain and meet call- adjust staffing levels managers.
Arrival Rate center level goals with traffic load.
by considering Does not consider
single-class call Considers uncertain analysis of call-
center as a queuing arrival rates. centers
model having performance.
uncertain arrival Determine the optimal
rate. This is done number of permanent Does not consider
by flexible staffing. and temporary operators. service-level
Thus, by constraints.
deterministic fluid Considers customer-
approximations we abandonment and Doesn’t consider
get the number of customer-waiting cost multi-class call
permanent and center.
temporary Reduces unnecessary
operators to hiring cost
maximize the
expected net
revenue

Peakedness-Based This paper talks The paper Helps in Still in early stage
Staffing for Call about the understanding the in the area of
Center Outsourcing variability in the variability in call peakedness so its
types of calls a call variance credibility cannot
Centre gets and be established
how it can be This is the first paper to
understood by propose the use of
using the peakedness to measure
peakedness call arrival variability in The research is not
principle. call centers work with a 100%
accuracy
The variability in It also does help by
 the type of the calls giving a simple approach
will help the to measuring variance in
company staff the calls thus helping in
people accordingly staffing accordingly
giving more cost
effectiveness.

Staffing to This paper talks Considers the Does not consider

Maximize Profit about investigating probability an uncertain arrival rates.
for Call Centers how staffing levels acceptable delay is
with affect compliance met by generalizing Does not consider
with alternate the heavy-traffic customer- abandonment
Alternate Service- SLAs i.e. Period- quality and and customer-waiting
Level Agreements based SLA, efficiency driven cost
Individual-Based regime.
SLA and Horizon- Does not consider multi-
Based SLA. It provides anew skill call centers
approximation for
Thus, demonstrate the abandonment
how rate.
approximations
may be used to It demonstrates how
determine the an outsourced call
staffing level that center operating in
maximizes the an environment
profit rate of a call with uncertain
center demand and
abandonment can
determine its
staffing policy to
maximize the
expected profit for
these SLAs.

It demonstrates a
high degree of
accuracy for the
approximations and
the resulting
staffing levels.

It considers how the

period length over
 which a service
level is measured
affects the
customer's
experience.

It considers
uncertain arrival
rates and allows
abandonment from
the queue.

It determines the
staffing level that
maximizes the
expected profit of
an outsourced call
center subject to the
alternate SLAs.

MINUTES OF MEETING - 1

DATE AND TIME 31ST JULY 2015 AT 4.15 PM

ATTENDES MUKUL SETHI

PIRADA P.

ALEX

HE ZHU

DIVYA

AGENDA Discuss all the possible topics as

discussed on Whatsapp group

Select one topic and the company

Points of Meeting  Company chosen as Optus
 Problems identified
 Find papers related to the
problem
 Assign work on next meeting
 Next meeting on 13th august

MINUTES OF MEETING - 2

DATE AND TIME- 8TH AUGUST 2015 AT 4.15 PM

ATTENDES MUKUL SETHI

PIRADA P.

ALEX

HE ZHU

DIVYA

AGENDA Discuss the papers uploaded by each

person and what are the papers that one
can use for the report.

Divide work and report structure

Points of Meeting  Papers identified

 Discuss the strengths and
weaknesses in next meeting
 Make a draft for the report
 Work allocated to everyone by
unanimous decision
 Every one submits there final
version of work by 21st august
 Review it by 23 august and
submit work