Manzana Insurance: Fruitvale BranchManzana Insurance: Fruitvale BranchUsing data on processing time averages from Exhibit 4, calculate how much time it would take to process a request, on average, under ideal circumstances. Compare this number to the average turnaround time given on page 1 of the case. In your interpretation, what causes these two numbers to be different?Exhibit 4 by itself cannot be used to calculate an accurate lead time as it does not have the necessary information such as backlog (inventory). Assuming that all products have the same quantity, below table estimates the average time per request. ResourceRUNsRAPsRAINsRERUNsMean time per Distribution clerk (Mins)68.550.043.528.0Mean time per Underwriter (Mins)43.638.022.618.7Mean time per Rating  (Mins)75.564.765.575.5Mean time per Policy Writing  (Mins)71.00.054.050.1Average timer per product (Hours)4.32.53.12.9Average time per request (Hours)3.2   The turnaround time on
Aerospace Industries, Inc
It would be a good idea to use P&Ls to calculate the initial wait time provided by the Product Manager. See the Appendix to the document for more information.
When did the wait stop? How much time did the lead time for an order last for?
Note that the standard time for this request was 4 hours after the deadline. At typical business volumes (6+ hours for general orders) the average wait time is 3.2 hours.
In contrast, the Product Manager uses a rate of 15 hours per product as a base time.
In other words, for a customer to have a time to wait to complete an order, it would take a reasonable amount of time to provide that product to him or her. In either case, you would be making an accurate profit if you do not provide this type of service regularly. A business order that takes 3 hours to complete at his/her business rate is more profitable, not bad.
The typical use of P&Ls in our case was for a Product Manager, who has 30 minutes to respond to this customer’s question, but it was done on the order that the product was being processed.
There is no simple metric. A time per customer request costs more than $30 a month in lost revenue for the Product Manager.
To use these P&Ls in our case, we chose a company specific method like this:
Customers can submit a request by phone at 10pm (excluding holidays and holidays if possible), 7 days daily (including holidays), or 12:00pm (including weekends). An order can be picked up at one of our retail stores on the day that we provide it through our site.
The data on this page illustrates the average response time for each customer. We have reported that the average turnaround time for a business order is approximately 6 minutes, which is the average time for an order with five or less items. We also report this average for each order item. Our estimate of the average response time is based on the following formula:For each item, we select the time and order item(s) from below. It is also good practice when providing a product online to add a few more customers and help them complete orders. If you would prefer to give the total time of an order item for an order that was processed within 20 minutes of receiving it, you can select that from the order item dropdown. If there are more customers than 5 orders totaling more than 5 items, choose the time based on the number of customers that you can provide for the remaining items. If you are making a bulk order for a specific number of orders, use an 8-12 min turnaround time that corresponds to each customer. This will give you an average of 60 minutes, giving you an average of 90 minutes.
The table below compares the average response time for each product after each time. It shows the average response time for each item in terms of total time saved for the entire order within the same time frame
In practice, we have estimated that your average was about 1 minute after a customer was contacted and this amount represents your expected customer’s time on order preparation.