The Lets-Do-A-Deal new car sales dealership needs to review and plan its services. It’s a very busydealership with an easy to access location. A new car sale is made on average to every second walk incustomer. Sales staff work mostly on a commission basis (there’s also a small retainer). Sitting in the glasspanelled office, the sales team keep an eye on the lot and take the walk-up customers in turn.But good sales staff need a guarantee of regular opportunities and don’t wish to be waiting around too longfor new targets (i.e., potential new car buyers). Helen, the dealership proprietor, suspects that some of thebetter salespeople have left in the last few years due to this issue. She’s tried various sales team numbers(from two to seven) but has just three now as the team resists employing new team members arguing thisreduces their own chance to make a sale. And anyway, the sales staff get edgy if they have to sit around formore that 15 minutes waiting for their next target. Helen feels conflicted by taking on more sales staff buther specified (and advertised) service standard is that all customers will be greeted on arrival – she feelsthat a failure here reduces customer trust and so results in a lost sale about half the time.Helen’s wondering whether there may be a way to get a better handle on the pattern of potential new carbuyers entering the lot. There’s no obvious pattern of walk-ups over the day (Monday to Friday 9:00 a.m. to6:00 p.m.) – it seems pretty random. But she needs to find the right balance between customer entrypatterns and sales staff numbers, this currently being three. The problem is that having too manysalespersons means them waiting around too long for customers and too few means that potentialunserved customers may be lost.She’s paying Shirley, an acknowledged expert in services management, $5000 to advise her about thisissue. Shirley documents the following data: Sales persons spend an average of 20 minutes with each new customer (whether this leads to a sale orno sale). For any given hour (based on a random sample), an average of 14 targets are available (potentialcustomers that typically enter the new car lot and then wander around the cars). The target arrivalpattern follows a Poisson distribution. Prepare a 50 word (maximum) statement to communicate the staff level situation (and any changes) to the current sales team. What alternative strategies that may be used to address the issues identified by Shirley?
The Lets-Do-A-Deal new car sales dealership needs to review and plan its services. It’s a very busydealership with an easy to access location. A new car sale is made on average to every second walk incustomer. Sales staff work mostly on a commission basis (there’s also a small retainer). Sitting in the glasspanelled office, the sales team keep an eye on the lot and take the walk-up customers in turn.But good sales staff need a guarantee of regular opportunities and don’t wish to be waiting around too longfor new targets (i.e., potential new car buyers). Helen, the dealership proprietor, suspects that some of thebetter salespeople have left in the last few years due to this issue. She’s tried various sales team numbers(from two to seven) but has just three now as the team resists employing new team members arguing thisreduces their own chance to make a sale. And anyway, the sales staff get edgy if they have to sit around formore that 15 minutes waiting for their next target. Helen feels conflicted by taking on more sales staff buther specified (and advertised) service standard is that all customers will be greeted on arrival – she feelsthat a failure here reduces customer trust and so results in a lost sale about half the time.Helen’s wondering whether there may be a way to get a better handle on the pattern of potential new carbuyers entering the lot. There’s no obvious pattern of walk-ups over the day (Monday to Friday 9:00 a.m. to6:00 p.m.) – it seems pretty random. But she needs to find the right balance between customer entrypatterns and sales staff numbers, this currently being three. The problem is that having too manysalespersons means them waiting around too long for customers and too few means that potentialunserved customers may be lost.She’s paying Shirley, an acknowledged expert in
Prepare a 50 word (maximum) statement to communicate the staff level situation (and any changes) to the current sales team. What alternative strategies that may be used to address the issues identified by Shirley?
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