Question: UPS has a problem with overtime (OT) spending. The UPS Budget Department claims the operations people over spend their OT budget by millions. The operations
UPS has a problem with overtime (OT) spending. The UPS Budget Department claims the operations people over spend their OT budget by millions. The operations chiefs say it is hard to match their workforce to the fluctuating demand. Demand can be forecasted, but it (predictably) varies greatly by season of the year. Because of that variability, there are months in which there are not enough workers available to do all the work, and on the other hand there are months in which there are extra or surplus workers. As such in some months there is OT and others surplus. When there is more work than workers available, UPS must bring in workers on overtime to match the need. To do that, UPS has to have workers come in on their sixth day of the week for a full day, for which they get paid the OT rate. In months with a surplus of workers, no overtime is spent. Those surplus workers are put to work, but the work they do does not reduce the workload of future months. (You can't deliver next month's packages with this month's surplus.)
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