Invoices arrive in the Spartan billing department to be processed and then billed to the customer. Please refer to figure on page 4 for a graphic representation of the Spartan Billing Department.
At random (with a probability of 10%), some of the billing accounts are audited by a supervisor. The other accounts are billed normally. Some of the invoices are for commercial accounts, which have special contracts as to how they should be billed, and are called contract bills. These accounts are handled with a different procedure than the normal bills. Normal bills do not require the special procedure.
Once bills are ready to be printed, both contract and normal bills print on the same printer, and are stuffed and mailed in the same way. After the bills go out, the revenue and sales figures are reported to the accounting department. The accounts receivable department also gets a copy of the bill for future credit or AR follow-up.
You’re in charge of the Spartan Billing Department and you have been asked to improve the process efficiency and reduce cycle time so that bills go out on time. You realize that there are queues building up in several places, which results in inefficiencies in the process.
Management wants a detailed plan for the modification of the process to improve efficiency and wants hard numbers to back up any proposal you submit. Remembering your time in ITM 309, you recall that Arena allowed you to simulate processes and quantify differences in results between alternative business processes. You decide to investigate the current process and model the potential financial and cycle time impacts of several changes you have in mind. Based upon your findings, you will make a recommendation to management about your specific business process reengineering plan.
Furthermore, you’ve heard of the possible future consolidation between billing departments of two regions. This implies that your billing department is going to take over the total business of two regions resulting in increased demand. It’s important for you to plan ahead for the increased work load, and include the analysis for increased demand in your email as well.
The IT business analysis group has provided you with a completed Arena model of the current billing process in the Spartan_Billing_Department.doe file (on D2L) as a starting point. You will evaluate the current billing process (Case 1) with Arena, then simulate and evaluate changes to the process for the other cases. The analysis requires you to simulate processes using Arena and summarize the results of your simulation evaluations and the impact of a number of proposed changes. You will provide your conclusions from your analyst of simulation cases and your direction for implementing any process changes (if applicable) based on your evaluation of the results. Your analysis, recommendations, and conclusion will be documented in a three-page memo sent to the Chief Executive Officer in the form of an email.
Set-Up Instructions for Arena (You may wish to refer to the Instructions Section of In-Class Practice Activities II):
- Download this file (Spartan_Billing_Department.doe) from D2L (Content à Assignments & Dropboxesà Assignment instructions & Data Filesà Assignment #1) and save it on your P drive.
- Launch Arena by clicking Start à Programsà Course Software à Rockwell Software à
- Click “File à Open”, browse to your P drive to select the Spartan_Billing_Department.doe You should see the diagram on the next page.
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