Service Quality in a Reduced payroll Environment: Applying Queuing Analysis to Customer Perception Case Study
DOI:
https://doi.org/10.37266/ISER.2013v1i1.pp51-58Abstract
This study was conducted in a national retail pharmacy company’s stores inWestern North Carolinato examine the impact of the reduction of store staffing, primarily pharmacists and service staff, on customers’ satisfaction with service time. Customer arrival rates and service times for each queue were conducted to determine optimal staffing. A random customer survey in multiple store locations provided customers’ perceptions of service quality. Analysis determined that over 30% of the customers surveyed were dissatisfied with service time. A regression analysis demonstrated a significant linear relationship (σ = 0.05) between total service time and customer satisfaction. Study results indicate that cutting staff could result in an unacceptable loss of a competitive advantage. Payroll cost savings of less than $70,000 per year could result in lost revenue dollars in excess of $1,700,000 per year. Thus reducing staff hours (decreasing payroll) in the short term may negatively impact long-term effectiveness and productivity.
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