Assignment 1

Topics: Economics, Costs, Estimator Pages: 2 (680 words) Published: July 17, 2014
Spartan billing department is a department that processes and bills invoices to customers. In current process, a supervisor audits around 10% billing account. Commercial accounts with special contracts will be handled through another process. For other accounts, the department just bills in regular process and no special process is required. The current process contains necessary steps but runs inefficiently. As an administrator of Spartan billing department, I will investigate the current process and modify the process to improve process efficiency.

By evaluating the current process, we can see the wait time for registering AR and financial is as long as 13.3 minutes. The wait time for the process of verifying bills is also longer than normal situation. The total cost of average per normal bill and average per contract bill is high. The reason for these is that the process is not efficient. In order to improve the process efficiency, I used Arena to simulate the process and to help me analyze the process. I will modify three aspects and try to figure out which process is more efficient.

The first one I changed was the process of registering AR and financials and also verifying bills. As noticed, too many orders were put on hold in the two processes; I modified the process to improve the working duration. This modification resulted in a dramatic change in the waiting time of registering AR and financials. From the table above, we can see the waiting time of registering AR and financials was reduced from 13.3 to 2.51 minutes. Moreover, the wait time of verifying bills was also decreased from 4.99 to 0.07 minutes. The total cost of average per normal bill and average per contract bill was also decreased. Compared to base case, the output of bills increased since more bills were processed each time. The process became more efficient after I changed the working process.

The second one I changed is the resource which was the labor cost for the senior biller and...
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