License Renewals analysis and memo

State Automobile License Renewals

Henry Coupe, the manger of a metropolitan branch of his state’s Department of Motor Vehicles, attempted to perform an analysis of the driver’s license renewal operations. Several steps are performed in the process. After examining the license renewal process, he identified the steps and associated times required to perform each step, as shown in the following table:

step Average Time to Perform (in seconds)
1. Review renewal application for correctness 15
2. Process and record payment 30
3. Check file for violations and restrictions 60
4. Conduct eye test 40
5. Photograph applicant 20
6. Issue temporary license 30

 

Each step was assigned to a different person. Each driver’s license application was a separate process in the sequence shown. Coupe determined that his office should be prepared to accommodate the maximum demand of processing 120 renewal applicants per hour.

He observed that the work was unevenly divided among the clerks, and the clerk who was responsible for checking violations tended to shortcut her task to keep up with the other clerks. Long lines built up during the maximum demand periods.

Coupe also found that jobs 1,2,3, and 4 were handled by general clerks who were each paid $8 per hour. Job 5 was performed by a photographer paid $8 per hour. Job 6, the issuing of a temporary license, was required by state policy to be handled by a uniformed motor vehicle officer. Officers were paid $12 per hour, and they could be assigned to any job except photography.

A review of the jobs indicated that job 1, reviewing the application for correctness, had to be performed before any other step could be taken. Similarly, job6, issuing the temporary license, could not be performed until all the other steps were completed. the branch offices were charged $8 per hour for each camera to perform photography.

Henry coupe was under severe pressure to increase productivity and reduce costs, but he was also told by the regional director of the Department of Motor Vehicles that he had better accommodate the demand for renewals; otherwise “heads would roll.”

 

1. what is the maximum number of applications per hour that can be handled by the present configuration of the process?
*answer>> 60
2. How many applications can be processed per hour if a seconed clerk is added to check for violations?
*answer>> 60*60=3600/40=90

3/ how would you suggest modifying the process with no new personnel (and only a bit of money)?

4. How would you suggest modifying the process in order to accommodate 120 applications per hour at a minimal cost?

The memo should address both question 3 and question 4 in 2 full pages, NOT INCLUDING EXCEL ATTACHMENTS.

Assumptions regarding question #3:
• “No new personnel” means you are back to the six employees you started with; you lost the extra clerk from question 2.
• Your model should not address time off for lunch, potty breaks, vacations, etc. Those complexities could be added in a future analysis, but are not required here.
• Every applicant must complete all the steps; the times for all the steps remain the same.
• The rules and regs above question #1 all continue to apply. Salaries can be increased, but not decreased.
• Make sure your memo includes the “delta” cost of your proposal. (Delta is the “change” from the present cost; you don’t have to calculate the present cost, just the change.)
• Make sure you have an attachment providing one (or more) simulations to show how your proposal(s) will work. You should use Excel to show your simulation, but your spreadsheet does not have to be based on formulas, you can do the calculations in your head (or use a hand calculator) and just enter the raw numbers if you choose. If you put multiple pages in your spreadsheet, make sure the individual sheets are clearly named. Note: I previously provided some screenshow hints about preferred formatting in Excel.

Assumptions regarding question #4:
• You are starting with six employees, if you choose to hire additional employees you must add in the cost in your “delta” calculation.
• As above, your model should not address time off for lunch, potty breaks, vacations, etc. Those complexities could be added in a future analysis, but are not required here. But, depending on your solution, you can include a brief discussion in your memo on how your solution would help under the more realistic scenario.
• Every applicant must complete all the steps; the times for all the steps remain the same.
• The rules and regs above question #1 all continue to apply. Salaries can be increased, but not decreased.
• Make sure your memo includes the “delta” cost of your proposal.
• Make sure you have an attachment providing one (or more) simulations to show that your proposal(s) will work. You should use Excel to show your simulation, but your spreadsheet does not have to be based on formulas, you can use a hand calculator and just enter the raw numbers if you choose. If you put multiple pages in your spreadsheet, make sure the individual sheets are clearly named.

Old Clerk New Clerk Inter Wait Idle
Step 1 Step 2 Step 3 Step 3 Step 4 Step 5 Step 6 Departure Time Time
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In Out In Out In Out In Out In Out In Out In Out
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Last Updated on March 11, 2020