Business Analysis Essay

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Call International oversees the quality of 200 call centers throughout the world. They want to determine how the centers compare among four variables for the most recent year:

Shift A Average Call Time (in minutes)
Shift B Average Call Time (in minutes)
Average Customer Satisfaction Level (on a 4-point scale: 1=poor, 2=average, 3=good, 4=excellent)
Average Number of Employees

Data collected for the sample of 200 Call Centers are contained in the file named Call Centers. Be sure to use all 200 data points.

Managerial Report

Prepare a report (see below) using the numerical methods of descriptive statistics presented in this module to learn how the variables contribute to the success of a call center. Be sure to include the following three items in your report.

Calculate descriptive sample statistics (mean, median, range, the two quartiles Q1 and Q3 (using QUARTILE.EXC), minimum, maximum, interquartile range, sample standard deviation, and coefficient of variation) for each of the four variables, along with an explanation of what the descriptive statistics tell us about the call centers.
In this case, which measure of central tendency would be best for this application? Explain why.
Which measure of variation would be best for this application? Explain why.
How can one use the above descriptive statistics to understand the call centers better?
Which graphical displays of data would you use to help understand or complement the above descriptive statistics? Explain how and why.
Note: QUARTILE.EXC works only for Excel 2010 or newer.

Use the z-score to determine which call centers, if any, should be considered outliers in each of the four variables.
If there are any outliers in any category, please list them and state for which category they are an outlier.
How would identifying outliers be useful in this application?
What advice might you give to call centers that are outliers?
How else would you determine outliers?
Compute the sample correlation coefficient, showing the relationship between Satisfaction Level and each of the other three variables (Shift A Average Call time, Shift B Average Call Time, Average Number of Employees).
Explain what the correlation coefficients tell us about the three pairs of relationships. Use tables, charts, or graphs to support your conclusions.

Sample Solution

y and maximise on savings. Paradoxically, a similar concept in service provision carries a ‘loyalty penalty’ for British consumers, who are losing out on £4bn a year (CMA, 2018). Firms exploit uninformed customers, by discriminating between them. Contrastingly, naïve consumers become complacent and blindly trust their current suppliers, whilst those that may be aware of such practises are deterred away by high search or switching costs.

In an environment where consumers are loyal, hence have an inelastic demand, or are simply uninformed, due to the presence of search costs, firms can choose to employ second and third-degree price discrimination. For example, British Gas offers a range of tariffs dependent on your needs, location etc. for electricity usage.

I illustrate how firms manipulate prices by adopting the Stahl-Varian model. We can change the assumptions from the original model so that the informed customers, I, are new customers, and the uninformed customers, M, are old customers. Thus, the uninformed customers will have a search cost, c, if they look for cheaper service providers. The other assumptions remain the same; all consumers have the same reservation price, r, and there are n symmetric firms in the market.

The number of old (uninformed) customers per firm, U, is exogenously given by:

Firms choose prices between p*, which equals to the marginal cost, and r. Informed customers have knowledge of prices provided by firms, thus, they will only buy from the cheapest firm.

The firm will sell to I with probability:

The firm will sell to M with probability:

Therefore, the firm’s expected profits are given by:

In a competitive market, firms behave in a way to maximise profits. Gamble et al., (2013), suggest firms are cognizant of customer costs; they recognise when customers are likely to switch. In this case, they will lower their price so that the price difference between theirs and rival prices is less than the search and switching costs, thereby stopping customers from switching.

The firm sets prices to maximises profits:

The derivative helps us find the profit maximisation pr

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