Problem: The Carlson Department Store suffered heavy damage when a hurricane struck on August 31, 2003. The store was closed for four months (September 2003 to December 2003), and now the company is involved in a dispute with its insurance company about the amount of lost sales during the time the store was closed. Two key issues must be resolved: (1) the amount of sales Carlson would have made if the hurricane had not struck and (2) whether Carlson is entitled to any compensation for excess sales due to increased business activity after the storm. More than $8 billion in federal disaster relief and insurance money poured into the county, resulting in increased sales at department stores and numerous other businesses. Prepare a short report for the managers of the Carlson Department Store that summarizes you findings, forecasts (please refer to excel spreadsheet; you can use any forecasting method of your choice but please specify what method you will be conducting), and recommendations. Please make sure to include an estimate of lost sales for the company during the four months.

1. The Commonwealth Banking Corporation issues a national credit card through its various bank branches in five southeastern states. The bank credit card business is highly competitive and interest rates do not vary substantially, so the company decides to attempt to increase its customer retention rate by improving customer service through a reduction in billing errors. The credit card division monitored its billing department process by taking daily samples of 500 customer bills for 30 days and checking their accuracy. The sample results are as follows:

Sample Number of Defectives

1. 7
2. 12
3. 9
4. 6
5. 5
6. 8
7. 10
8. 11
9. 14
10. 10
11. 9
12. 6
13. 3
14. 2
15. 8
16. 10
17. 12
18. 14
19. 16
20. 15
21. 13
22. 9
23. 10
24. 12
25. 15
26. 14
27. 16
28. 12
29. 15
30. 14

Develop a control chart for the billing process using \[3\sigma \] control limits and indicate if the process is in control. What happens if you use \[2\sigma \] control limits? Why do you think you may have different conclusion depending upon different sigma level? If that is okay, then isn’t it somewhat arbitrary to use control chart? Make comments.

3.) Write a short report (maximum of 2 pages) on the case below:

Case: Analyzing Casino Money-Handling Processes

Retrieving money from a slot machine is referred to as the drop process. The drop process begins with a security officer and the slot drop team leader obtaining the slot cabinet keys from the casino cashier's cage. Getting the keys takes about 15 minutes. The slot drop team consists of employees from the hard count coin room, security, and accounting. The slot drop leader, under the observation of a security officer and a person from accounting, actually removes the drop bucket from the slot machine cabinet. When the drop bucket is pulled from the slot cabinet, a tag with the proper slot machine number is placed on top of the coins to identify where that bucket came from when the weigh process begins. Retrieving the drop bucket takes about 10 minutes per slot machine. Once a cart is filled with buckets from 20 different slot machines, the drop team leader and security and accounting people deliver the buckets to the hard count room. The buckets are securely locked in the hard count room to await the start of the hard count process. Delivering and securing the buckets takes about 30 minutes per cart.

The hard count process is performed at a designated time known to gaming regulatory authorities. The hard count team first tests the weigh scale, which takes 10 minutes. The scale determines the dollar value, by denomination, for set weights of 10 and 25 pounds. These results are compared to calibration results, calculated when the scale was last serviced, to determine if a significant variance exists. If one does exist, the hard count supervisor must contact the contractor responsible for maintaining the scale and the controller's office. If no significant variance is found, the weigh process can continue.

Following the scale check, each drop bucket is emptied into the weigh scale holding hopper. Using information from the identification tag, the specific slot machine number from which the bucket originated is entered into the weigh scale computer. The weigh scale computer is programmed to convert the weight of coins, by denomination, into specific dollar values, which are recorded in the weigh journal along with the slot machine number. This weighing and recording process takes seven minutes per bucket. Once the scale has weighed the contents of the drop bucket, the coins automatically drop onto a conveyor belt, which transports them to wrapping machines. As the coins are wrapped, the rolls of coins drop onto another conveyor belt, which takes them to a canning station. Twenty-five silver dollars are wrapped in each roll at a rate of 10 rolls per minute.

At the canning station, the coin rolls are placed in metal or plastic cans that hold specific dollar amounts based on coin denomination. The cans are stacked to facilitate counting the wrapped coins. Silver dollar cans hold $1,000, or 40 rolls, and take five minutes to fill and stack. When the weigh process is completed, the weigh scale computer runs a summary report totaling the weight by denomination. These totals are recorded on the weigh/wrap verification report, which takes five minutes to produce.

When the wrap portion of the count is completed and all of the rolled coins have been canned and slacked, they are manually counted by denomination. These totals are also recorded on the weigh/wrap verification report. The variance in both dollar amounts and percentages, for each denomination, is calculated. Variances that exceed plus or minus 2 percent or are $ 1,000 or greater (whichever is less) must be investigated by the hard count supervisor, who writes an explanatory report. If no significant variances exist, all members of the hard count team sign the weigh/wrap verification report. To complete the hard count process, the casino cashier's cage is then notified that the slot drop is ready to be transferred into cage accountability. Manually counting and verifying the counts take on average two minutes per can.

In a process separate from the hard count, a cage cashier performs an independent count and verification, by denomination, of the wrap. If everything balances, the main bank cashier signs the weigh/wrap verification report, accepting the slot drop into cage accountability. It is at this point that the actual slot gross gaming revenue is recognized.

Solution: First of all, we need a diagram of the process:

The counting is complex and requires many steps. Based on the information provided, completion time for the tasks is not random, which is rather unrealistic assumption, but we’ll stick to it because that is the way the problem is formulated (The most realistic setting would be one where the tasks have a mean completion time and a associated standard deviation)

The most important issues that we would be interested in are:

• Completion time
• Cost of the counting process
• Optimality of the counting process
• Completion time : Under the assumption of non-random completion times for each task, it would be possible to determine exactly the completion time for this process. This would obviously depend on many factors, such as the number of slot machines, the number of counting teams, the number of weigh scales, the number of canning machines.
  It is clear that in many stages of the process, multiple is required to reduce the process time (In fact, consider the case of just 1 team getting the drop buckets from the slot machines. With 20 slot machines that would take more than 3 hours.)
• Cost of the counting process : This point is related to the previous one. The process should be optimized in such a way that the cost of counting per dollar is the lowest. For this purpose, it’d required to evaluate the need for more machines or more teams to perform parallel activities.
• Optimality of the counting process : This point is related to the previous two. We need to determine which process should be perform in a parallel way in such a way of minimizing the cost and time of the entire process.

Price: $37.67

Solution: The downloadable solution consists of 18 pages, 1967 words and 5 charts.
Deliverable: Word Document