Question: Problem 1: Linear Optimization Los Angeles Credit Union (LACU) serves three types of the checking customers e-checking customers who only utilize the online channel, the

Problem 1: Linear Optimization Los Angeles Credit
Problem 1: Linear Optimization Los Angeles Credit
Problem 1: Linear Optimization Los Angeles Credit
Problem 1: Linear Optimization Los Angeles Credit Union (LACU) serves three types of the checking customers e-checking customers who only utilize the online channel, the core-checking customers who rely on both the branch services and the online channel, and the premier checking customers who rely on the branch services only. The average resource time needed for each type of customers is summarized in the following table, Time needed (min) e-checking customer core-checking customer premier checking customer Via Online Chatting 5 5 0 At the Branch 0 15 40 The customer support team consists of 5 CSRs, 2 of them are level 1 CSRs and 3 of them are level 2 CSRs. Currently, level 1 CSRs only serve the e-checking customers and level 2 CSRs only serve the core-checking and premier checking customers. In each working day, each CSR has 7 hours working with the clients, LACU gets 140 e-checking customers, 50 core-checking customers, and 10 premier checking customers every day. For their new customer orientation process, LACU can either utilize its own customer support team (ie, the 5 CSR mentioned above) or outsource the jobs to a special service firm, which charges $5 for each e-checking customer, $15 for each core-checking customer, and $25 for each premier checking customer. LACU wants to determine how many of each type of customers to outsource, in order to minimize the cost (The compensation of the CSRs is independent of their workload.) a. What are the decision variables? b. What is the objective function? c. What are the constraints? LACU solves the formulation and generates the following sensitivity report: Variable Cells Name Cell $B$4 $C$4 $D$4 Final Reduced Objective Allowable Allowable Value Cost Coefficient Increase Decrease 0 5 5 1E+30 5 2.5 15 1E+30 3.5 0 25 5 25 2.5 Constraints Final Shadow Constraint Allowable Allowable Value Price R.H. Side Increase Decrease Cell Name CSR Level $B$ 81 CSR Level $B$92 700 0 840 1E+30 140 1260 -0.625 1260 140 1E+30 d. What is LACU's optimal outsourcing cost based on the report? e. Assume that a Level 1 CSR needs to be away from work for two hours for a particular day. How much would that cost LACU? f. Assume that a Level 2 CSR needs to be away from work for two hours for a particular day. How much would that cost LACU

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