Allocating Telecommunications Resources at L. L. Bean, Inc

Phil Quinn, Bruce Andrews and Henry Parsons
Additional contact information
Phil Quinn: Strategic Planning Department, L. L. Bean, Inc., Casco Street, Freeport, Maine 04033
Bruce Andrews: School of Business, Economics, and Management, University of Southern Maine, Portland, Maine 04103
Henry Parsons: School of Business, Economics, and Management, University of Southern Maine, Portland, Maine 04103

Interfaces, 1991, vol. 21, issue 1, 75-91

Abstract: We developed and implemented a model for optimizing the deployment of telemarketing resources at L.L. Bean, a large telemarketer and mail-order catalog house. The deployment levels obtained with economic optimization were significantly different from those formerly determined by service-level criteria, and the resultant cost savings were estimated as $9 to $10 million per year. To develop the economic-optimization approach, we used queueing theory, devised an expected total-cost objective function, and accounted for retrial behavior and potential caller abandonments through a regression model that related the abandonment rates to customer service levels. Management at L.L. Bean has fully accepted this approach, which now explicitly sets optimal levels for the number of telephone trunks (lines) carrying incoming traffic, the number of agents scheduled, and the maximum number of queue positions allowed for customers waiting for a telephone agent.

Keywords: cost/benefit analysis: expected penalty cost minimization; queues: applications: economic optimization of telecommunications resources (search for similar items in EconPapers)
Date: 1991
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