Simulation Case Study: Phoenix Boutique Hotel Group

Phoenix Boutique Hotel Group (PBHG) was founded by Bree Bristowe and has since rose to be one of the high performing businesses. Currently, the boutique hotel has employed 3 agents to manage its reservations across its three locations. The shift for the phone call reservation is 6 a.m. to 2 p.m. where on average; it takes 7 minutes to process a customer’s request for reservation. However, the reservation processing time ranges from 6 minutes. Of late, there has been a concern about the time customers wait on the line for their reservation to be processed. As a consequence, the boutique hotel wants to reduce the waiting time to less than 2 minutes by employing more agents for the call shifts. Moreover, there is a national travel magazine that the hotel and its founder are supposed to feature in. the magazine has over a million subscribers and its expected that number of customers who will request for reservations will increases upon the featuring of the hotel and its founder. To cub the expected increase in customers, this paper offers recommendations to the hotel boutique in terms of call reservations through the simulation model (Thomopoulos, N. T. (2015).

From the simulation model in excel, it is evident that the agents are busy all through the shifts because the model reveals less than a minute idle time for the agents. Also, the model reveals that the average waiting ting time for the customers on the line is more than two minutes. For this reason, to reduce the waiting time to less than two minutes, it is recommended that the hotel boutique should employ additional agents to serve more customers and reduce the time the customers are on hold for less than two minutes. The number of customers on hold will be decreased because the many will be served at a go by the agents. 

On the other hand, it should be noted that increasing the number of the agents serving the customers come with drawbacks. This is because more revenues will be used to cater for the salaries of the additional agents. Thus the profit margins will decrease as a result of increasing overhead costs. Moreover, more telephone line will have to be purchased thus reducing the resources of the company will increasing its assets. The founder should also note that the increase number of customers as a result of featuring in the national travel magazine will overwhelm the current workforce thus the increasing of the number of agents to serve the customers. Other than the drawbacks, the profits are also expected to increase because of the increase in number of customers the ports will therefore be able to surface the salary of workers. Also, the cost of acquiring new telephone lines will be lower when compared to the expected profit margin.

Based on the simulation model and Render et al. (2015), it is advisable that PBHG should add more agents to cater for the expected increase in customer base. Given that currently there are 3 agents serving the customers yet the waiting time is more than two minutes, it is important for PBGH to hire more agents because the risk of additional cost caused by increased number of workers and acquiring more telephone lines will be catered for by the expected increase in profits.

References 

Render, B., Stair, R. M., Hanna, M. E., & Hale, T. S. (2015). Quantitative analysis for management.Thomopoulos, N. T. (2015). Demand forecasting for inventory control