Customer Service Costs Research Articles

Distribution planning for multi-echelon networks considering multiple sourcing and lateral transshipments

Nowadays, due to the increasing complexity of business environment, especially demand uncertainty, supply chain managers need to establish more-effective sourcing and distribution strategies to ensure high customer service and low stock costs. To overcome this challenge multi-echelon network structures and alternative distribution strategies such as lateral transshipments and multiple sourcing should be considered in inventory optimisation models. In this article, we propose a scenario-based modelling approach to solve a two-stage multi-echelon inventory optimisation problem with a non-stationary demand. The model is based on a distribution requirements planning (DRP) approach and minimises the expected total cost that is composed of the fixed allocation, inventory holding, procurement, transportation, and back-ordering costs. Alternative inventory optimisation models, including the lateral transshipment strategy and multiple sourcing, are thus built, and the corresponding stochastic programmes are solved using the sample average approximation method. Through a numerical investigation conducted with several generated instances and an empirical investigation based on the case of a major French retailer’s distribution network, we show the substantial benefit of lateral transshipments and multiple sourcing in reducing the expected total costs of the distribution network.

Chatbots — an organisation’s friend or foe?

ABSTRACTIn recent years, the use of artificial intelligence has increased tremendously and the hospitality industry has not gone unaffected. Nowadays, chatbots, which simulate human conversations, are almost indispensable in the customer service branch of hospitality. Where organisations started rapidly with the introduction of this new technology, they are now raising the question of whether or not this technological evolution is a good development for this industry. On the one hand, chatbots improve and accelerate customer service, saving time and labour costs. On the other hand, there are privacy and security concerns, lack of personality and lack of research resulting in errors and financial expenses. Presently, chatbots are seen as a technology to support human service, but due to rapid development this situation is open to change.

The impact of internet of things on customer service: A preliminary study

The study discuss about internet of Things on serving passengers at Queen Alia International Airport in Amman, Jordan, by knowing its importance and how to minimize its shortcomings in order to improve customer service at the airport. This research allowed us to understand the fears that travelers had, which, if provided, would ensure greater service improvement. Search results show that there is a great impact on Internet things on customer service. The results showed that the variables (safety and scalability) have a statistically significant impact on customer service. While the cost has a clear positive effect, it is not statistically significant. The study also showed that there is a significant impact on the cost of customer service. Security plays an important role in customer service, meaning that there is a significant security impact on customer service. It shows that the most important factor in customer service is security. Extensibility is the key to a successful Internet object system and it is important to focus on it.

Product manual elaboration in product design phases: Behavioral and functional analysis based on user experience

In classical design methods, intuitive consideration is given to how the product, or the system that is the subject of the design, is used. How the product is used is defined in a product manual. It is taken into account in the final phase of the techno-centric process, which leads not only to modifications of the late design phases, but also to difficulties using the product. Product manual also helps businesses save significant staff training and customer service costs. Anthropocentric methods are rarely used by the general public, and are in fact too expensive. We propose to take product use into account by integrating behavioral analyses (the behavior of the product and of its user) with functional analyses. This will allow us to set out instructions for using the product right at the design stage. An analysis of techno- and anthropocentric approaches is presented in this work in a bid to position our approach. Next, a functional and behavioral analysis is proposed based on a car seat case study. The proposed method also calls for a phase dedicated to the collection of product use information and data on user feedback or legislatives data. These analyses are carried out using the QFD method in order to assist the designer in structuring knowledge, taking into account the functions of the product, the characteristics or criteria of its use, and the points to be developed when drawing up operating instructions.

Chatbot for University Resource Booking

Chatbots are programs that mimic human conversation using Artificial Intelligence (AI). It is designed to be the ultimate virtual assistant, entertainment purpose, helping one to complete tasks ranging from answering questions, getting driving directions, turning up the thermostat in a smart home, to playing one’s favorite tunes etc. Chatbot has become more popular in business groups right now as they can reduce customer service cost and handles multiple users at a time. But yet to accomplish many tasks there is need to make chatbots as efficient as possible. To address this problem, in this paper we provide the design of a chatbot, which is efficient and timesaving in booking University/Institution resources like auditoriums, seminar halls, projectors etc which is built using Dialogflow, Nodejs, and PostgreSQL. This chatbot can be used by any University/Institution to book resources.

A study on performance rating of SBI Group: Camel model analysis

The merger and acquisitions in public sector banks especially SBI with tis associate banks, have stirred the banking sector. There is various view point by experts that the merger will lead to rationalization of resources, improve productivity, customer service and lower cost of lending funds. The current work tries to evaluate the merger of largest public sector bank i.e. State bank of India and its five associate banks viz, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore and Bharatiya Mahila Bank with effect from April 1, 2017 The merger is to be done in phased manner. The study has adopted CAMEL (Capital Adequacy, Asset Quality, Management, Earning and Liquidity) Model to evaluate the SBI and its associate banks performance and rank the selected banks on target performance indicators. The study concludes that SBBJ has high efficiency in terms Capital Adequacy, SBP in Assets Quality, SPT in Management Quality, SBH in Earning Quality and whereas in Liquidity SBI has the top position. All banks have different competitive advantages and the merger has lead to exploit each other competitiveness for banks overall performance.

Permutation Flow Shop Scheduling With Batch Delivery to Multiple Customers in Supply Chains

Rapid changes in production environments have motivated researchers and industrial manufacturers to coordinate the production and distribution in supply chain management. This paper aims to address the permutation flow shop scheduling problem with batch delivery to multiple customers. In this problem, products are first manufactured in a permutation flow shop, and subsequently delivered to multiple customers in batches. To optimize the tradeoff between customer service and distribution cost, the objective of this paper is to minimize the total cost of tardiness and batch delivery. To deal with such optimization problem, two simple heuristics and a novel meta-heuristic (GA-TVNS) are developed to determine integrated production and distribution schedules. GA-TVNS hybridizes genetic algorithm and variable neighborhood search (VNS) to provide better exploration and exploitation in the search space. Moreover, to improve the local search of VNS, two new learning-based neighborhood structures are designed based on the classical school learning process of teaching–learning-based optimization. Computation experiments on both small-sized and large-sized test problems indicate that GA-TVNS performs the best among all the compared scheduling algorithms.

Localised fault location on a distribution network – case studies and experience

A reduction in time required to locate and restore faults on a utility's distribution network reduces customer minutes lost. Detection of repeating transient (self-clearing) faults allows early repair and avoids full faults which reduces the number of customer interruptions. Both these reductions bring improved customer service and direct cost savings from lower regulator penalties. Traditional approaches to fault location involve fault impedance determination from high-volume waveform files dispatched across a communications channel to a central location for processing and analysis. This study describes an existing distributed scheme, where data processing is undertaken locally within substation-based recording instruments thus reducing data volume transmission. Processed events/faults and impedance data are emailed to a central server for entry into the graphical information system, which returns potential fault locations yielding timely repair and restoration of circuits. This study presents a series of fault location case studies based on field experience from the Scottish Power Energy Networks distribution network.

Dimensionamiento de Almacén a partir de la Planificación de Requerimiento de Materiales en una Fábrica de Revestimiento de Poliuretano

Context: the design of the warehouse is a key factor in the configuration of logistics systems, as it can facilitate the timely management of materials, intermediate and/or final products, improving the time, cost and levels of customer service. To achieve this, experts help is required to integrate within the design an appropriate combination of storage, manipulation of materials and selection of orders. This level of integration, however, has not yet been achieved since the advances in the subject have been addressed from different aspects of the storage problem, but independently.Method: the article presents a method for warehouse layout design in two phases. The first phase defines the variables and parameters that are obtained from the planning of the production; the second phase consists of five stages that culminate in the integral design of the warehouse. In this last phase a modified version of an existing mathematical model of sizing is applied, where a new equation is added.Results: the method is applied to a company that supplies liquid polyurethane in the construction sector. The design generates four options for configuration of shipping and receiving docks and five storage options, where the best option generates an average area, mean real capacity and percentage average of storage utilization of 374,8 m2, 360 pallet and 93,8% respectively. These results are coherent with the dynamics of the company.Conclusions: the method allows evaluating options of the flow configuration and their respective sizing than may influence decisions of great importance in the operational capacity of the company in the short, medium and long term. In the future research is interesting to include new conditions, for example the compatibility of the method with different distributions to the traditional configuration of parallel shelves.

The Evolution of Omni-Channel Retailing and its Impact on Supply Chains

Abstract We discuss how omni-channel supply chain networks can be structured in terms of facilities, inventory, transportation and information to be both cost effective and responsive to customer needs. This requires exploiting the complementary strengths of the physical and the online channel to create an omni-channel portfolio that can tailor the fulfillment of each customer request based on product and customer characteristics. To be successful, a firm must target price or service conscious customers using different channels based on the demand uncertainty, value, and information complexity of the product being sold. In general, the physical channel should be used to serve frequent and predictable needs in a cost effective manner. The online channel should be used to provide variety and serve sporadic needs at low cost. The physical channel can also serve as a showroom and pickup location for the online channel to improve customer service and decrease cost.

A Methodology for Economic Evaluation of Cloud-Based Web Applications

Cloud technology is an attractive infrastructure solution to optimize the scalability and performance of web applications. The workload of these applications typically fluctuates between peak and valley loads and sometimes in an unpredictable way. Cloud systems can easily deal with this fluctuation because they provide customers with an almost unlimited on-demand infrastructure capacity using a pay-per-use model, which enables internet-based companies to pay for the actual consumption instead of peak capacity. In this paradigm, this paper links the business model of an internet-based company to the performance evaluation of the infrastructure. To this end, the paper develops a new methodology for assessing the costs and benefits of implementing web-based applications in the cloud. Traditional performance models and indexes related to usage of the main system resources (such as processor, memory, storage, and bandwidth) have been reformulated to include new metrics (such as customer losses and service costs) that are useful for business managers. Additionally, the proposed methodology has been illustrated with a case study of a typical e-commerce scenario. Experimental results show that the proposed metrics enable internet-based companies to estimate the cost of adopting a particular cloud configuration more accurately in terms of the infrastructure cost and the cost of losing customers due to performance degradation. Consequently, the methodology can be a useful tool to assess the feasibility of business plans.

Keys to optimising workforce resources across the enterprise

Purpose – Optimising workforce resources has become increasingly complex, particularly for large enterprises and those operating in multiple locations or countries. To be successful, human resource (HR) and the organisation’s line managers need to be strategic and nimble – able to quickly and decisively respond to any number of complex factors at a moment’s notice. These factors include internal considerations, such as employee qualifications and availability, as well as external dynamics, such as supply chain changes and expanding labour compliance regulations. Failure to respond quickly can prevent organisations from being able to reach optimal productivity and performance goals. Design/methodology/approach – Organisations seeking to achieve complete visibility should look first to the three pillars of an effective workforce management strategy – demand, utilisation and measurement – to better understand how they can be optimised to increase agility, improve customer service and reduce labour costs. Findings – Organisations that incorporate all three of these pillars – demand, utilisation and measurement – into their ongoing workforce management strategy will see the greatest impact in terms of increasing productivity and efficiency, as well as identifying new best practices that can be applied across the enterprise. Investing in solutions and practices that support workforce optimisation can also deliver greater agility, improved customer service and lower total costs. Originality/value – The ability to manage change effectively, whether it stems from external or internal factors, is critical to creating a sustainable, resilient organisation. Particularly because your workforce is likely the greatest asset and contributor to your overall success, equipping HR and managers with the right tools and data to increase effectiveness is essential to helping your organisation meet customer expectations, respond to change quickly and effectively and drive measurable gains in business performance.

Analysis of a hybrid warranty policy for discrete-time operating products

This article considers a warranty policy consisting of a renewable free-replacement period and a rebate period for products operating in discrete time. Under such a Hybrid Warranty Policy (HWP), if a product fails during the first N periods (from period 1 to period N), it is replaced with either a new or a repaired unit for free (or at the manufacturer's expense) and the policy is renewed; if it fails in the next W − N periods (from period N + 1 to period W), then the manufacturer refunds a pre-specified proportion of the sales price to the buyer. A pure rebate warranty policy and a pure renewable replacement policy can be considered as special cases of the HWP. With the HWP, customer service and warranty cost can be traded off. The conditions under which the HWP is more cost-effective are derived from the perspective of the manufacturer or seller. Some structural properties of the HWP are examined. Furthermore, how to choose between using new and repaired products to replace failed products is discussed. A numerical example is presented to demonstrate the computation of the optimal N*, the decision variable of the HWP, and a sensitivity analysis is performed to gain some managerial insights for practitioners.

Pricing and retail service decisions in fuzzy uncertainty environments

This paper studies the pricing and retail service decisions of a product in a supply chain with one manufacturer and two retailers. It is assumed that the supply chain is operated in fuzzy uncertainty environments. The fuzziness is associated with the customer demands, manufacturing costs and service cost coefficients. Three different game structures are considered, i.e., Manufacturer-leader Stackelberg, Retailer-leader Stackelberg, and Vertical Nash. Expected value models are developed to determine the optimal pricing and retail service strategies. The corresponding analytical equilibrium solutions are obtained by solving the models. Finally, numerical examples are presented to illustrate the effectiveness of the theoretical results, and to gain various marketing strategies employed under different situations.

Research on the Construction of Green Evaluation Model Based on IOT of Agricultural Products

—The agricultural supply chain evaluation system is divided into three levels, six categories. It is mainly from the cost of business, operational status, production quality, customer service, environmental protection and financial value. The thesis focuses on green supply chain evaluation model of "Dish Network" integration. The establishment of the evaluation model, green supply chain evaluation of “Dish Network " gives two important issues: the selection of index and assignment methods. This article is more successful solution "Dish Network” green supply chain index and assignment problems. However, this study has some limitations. The research process, although at the time near building evaluation model to imitate the actual maximum possible steps, but based on agricultural supply chain has just started, the agricultural green supply chain development time is not long, practical demonstration of reliability is not strong. For node enterprise technology capabilities, management capacity and other aspects is in higher demand.Key words: Agricultural Green Supply Chain;Performance Evaluation;Dish Network

The Impact of Logistics Performance on the Sales Level: An Empirical Study in Retail Sector

The aim of this research is to assess the impact of logistics performance on retail sector. This research was conducted in Palu in Central Sulawesi Province. There are several indicators involve in this study, such as, customer service, operation metric, and logistics cost. This research is categorized as explanatory research and multiple regression method was used to analyze the hypotheses. Simultaneously, this research found that logistics performance has significant contribution to sales level. However, customer service has not had positive contribution to sales level compare to operation metric and logistics cost. In addition, logistics cost has big impact on the sales level of retail groceries. The result of this research can be used by academicians and professionals who intent to deal with logistics in retail sector. This research also identifies that logistics performance need further study in different region and sector with the aim to improve the understanding of dimensions.

Do investments in intangible customer assets affect firm value?

• We model intangible customer asset investment. • We test whether measures derived from the model help explain firm value. • Per-customer revenue positively impacts value; more for low-growth firms. • Per-customer acquisition cost negatively impacts value; more for high-growth firms. This paper develops a simple model of investment by service firms in intangible customer assets, and tests whether the model identifies some critical drivers of firms’ stock returns. Similar to firms with significant research and development (R&D) expenditures, we argue that firms in fast-growing service industries with few tangible assets can increase firm value by investing in customer acquisition and service (A&S) expenditure. Using a unique hand-collected data set, we show that per-customer changes in firms’ revenues, customer acquisition costs, and customer service costs help to explain their abnormal stock returns.

Typology of Resources and Capabilities for Firms’ Performance

Firms’ resources and capabilities (RCs) are essential for firms’ sustainable competitive advantage. Though literature has demonstrated the important of RCs for achieving firms’ competitiveness, there is a lack of understanding of the exact levels of which different types of resources are optimal or superior. This paper proposes and tests a typology of resource and capability (RC) profiles for third-party logistics service providers (LSPs). Based on cluster analyses of survey responses from Malaysian LSPs, the paper reveals three clusters of resource profiles (uniformly low, medium, and high levels) in terms of basic technology and equipment, advance technology and equipment, knowledge, organizational and relational resources. Further analysis of variance (ANOVA) reveals that these three resource profiles varied significantly in LSPs’ performance. The results suggest that LSPs with uniformly moderate and high resource profiles were most likely to perform better in terms of both customer service innovation and cost leadership.

Does A Long-Term and Active Customer of A Current Savings Account Have A High Lifetime Value?

A basic tenet of relationship marketing is that firms benefit more from maintaining long-term customers; however, it is not clear whether the need for maintaining personal banking services of long-term and active customers (e.g., current savings accounts) is in the best interest of bank profitability (Reinartz and Kumar, 2000). The primary objective of this study is to provide a rigorous and differentiated empirical analysis of the lifetime and active-profitability relationship in a non-contractual service context. In this study, the authors find that, in personal bank service scenarios, the most valuable customers are those who are less active and have high account balances. Moreover, the correlation between customer activity, lifetime length, and profitability is not significantly positive; long customer lifetimes do not necessarily increase revenue or decrease the cost of customer service. Furthermore, a large number of transactions do not necessarily indicate a high lifetime value, and not all active customers contribute to large bank profits. The authors develop plausible explanations for findings that go against available evidence in the literature, which can help managers focus their efforts on more profitable customers. The authors also draw several marketing implications and acknowledge the limitations of this study. Keywords: CLV, RFM, NBD, Gamma-Gamma, Exponential Smoothing

Does the Web Reduce Customer Service Cost? Empirical Evidence from a Call Center

Firms are investing millions to deploy Web-based self-services at their call centers. The rationale for such investment is that the firm's cost of interacting with its customers through the Web-based channel is an order of magnitude cheaper than the assisted channels such as telephony. We conduct a field study at the call center of a prominent U.S. health insurance firm to examine this cost-saving rationale of the Web-based self-service channel. On the one hand, the Web channel may substitute for the telephony channel in some cases. On the other hand, the Web also exposes customers to a vast amount of information about their health policy, claims, and coverage; this information can create uncertainty leading to customers seeking more information and hence making more telephone calls. We designed a quasi-natural experiment in our field setting and used difference-in-difference specifications to show that the Web-based self-service usage leads to a 14% increase in telephone calls. We conduct several robustness checks to show that our specifications are robust to any potential selection of customers in the Web-based self-service usage. We further find that the impact of Web portal usage is moderated by the Web portal characteristics. We find that if the information is unambiguous and easily retrievable on the Web, calls for such information decline by 29%. However, for ambiguous information, the calls increase substantially. Our research provides insights into the challenges and opportunities of self-service technologies design.