FAR EASTERN UNIVERSITY

Fundamentals of Business Analytics

1st Semester A.Y. 2019-2020

PHOENIX COMPUTER

Final Project Case Analysis

MGT1102 Section-16

Group 4

Maravilla, Rianne

Narvaza, Dhenmarc

Nieto, Thania Mae

Oliveros, Mary Mee

2019
CASE ANALYSIS:

Phoenix Computer
Phoenix Computer manufactures and sells personal computers directly to customers.
Orders are accepted by phone and through the company’s Web site. Phoenix will be introducing
several new laptop models over the next few months, and management recognizes a need to
develop technical support personnel to specialize in the new laptop systems. One option being
considered is to hire new employees and put them through a three-month training program.
Another option is to put current customer service specialists through a two-month training
program on the new laptop models. Phoenix estimates that the need for laptop specialist will
grow from 0 to 100 during the months of May through September as follows: May - 20; June -
30; July - 85; August - 85; and September - 100. After September, Phoenix expects that
maintaining a staff of 100 laptop specialists will be sufficient.
The annual salary for a new employee is estimated to be $27,000 whether the person is
hired to enter the training program or to replace a current employee who is entering the training
program. The annual salary for the current Phoenix employees who are being considered for the
training program is approximately $36,000. The cost of the three-month training program is
$1500 per person, and the cost of the two-month training program is $1000 per person. Note
that the length of the training program means that a lag will occur between the time when a new
person is hired and the time a new laptop specialist is available. The number of current
employees who will be available for training is limited. Phoenix estimate that the following
number can be made available in the coming months: March -15; April - 20; May - 0; June - 5;
and July - 10. The training center has the capacity to start new three month and two-month
training classes each month; however, the total number of students (new and current
employees) that begin training each month cannot exceed 25.
Phoenix needs to determine the number of new hires that should begin the three-month
training program each month and the number of current employees that should begin the two-
month training program each month. The objective is to satisfy staffing need during May through
September at the lowest possible total cost; that is, minimize the incremental salary cost and the
total training cost.
It is currently January, and Phoenix Computer would like to develop a plan for hiring new
employees and determining the mix of new hires and current employees to place in the training
program.
 Perform an analysis of the Phoenix Computer problem and prepare a report that
summarized your finding. Be sure to include information on and analysis of the following items:
1. The incremental salary and training cost associated with hiring a new employee and
training him/her to be a laptop specialist

2. The incremental salary and training cost associated with putting a current employee
though the training program. (Don’t forget that a replacement must be hire when the current
employee enters the program)

3. Recommendations regarding the hiring and training plan that will minimize the salary and
training costs over the February through August period as well as answers to these questions:
What is the total cost of providing technical support for the new laptop models? How much high
higher will monthly payroll costs be in September than in January?

Statement of the Problem:

It is currently January, and Phoenix Computer would like to develop a plan for
hiring new employees and determining the mix of new hires and current employees to place in
the training program.

Objective:

Phoenix needs to determine the new hires that should begin the three-month training
program each month and the number of current employees that should begin the two-month
training program each month
satisfy staffing need during May through September at the lowest possible total cost;
that is, minimize the incremental salary cost and the total training cost.