Question

Your supervisor at Nationwide Insurance asks you to evaluate an existing insurance application process. The process requires manual keying 3 different forms by a team of data entry operators. The 3 forms' input times appear in Table A along with the numbers of each type of form anticipated for the coming year. A proposed refinement in the process would reduce the number of forms but make each slightly longer. This would be combined with a search of public records on the World Wide Web as necessary. These times and quantities appear in the lower half of the table. If the labor rate for the data entry operators is the same, which method is preferable?

Table A

FORM	TIME TO INPUT (minutes)	QUANTITY (forms / year)
Part A - Existing Method	3	1,200,000
Part B - Existing Method	3	1,200,000
Part C - Existing Method	4	1,100,000
Part A - Proposed Method	4	1,200,000
Part B - Proposed Method	4	1,200,000
Web Search - Proposed Method	2	650,000

Answer 1

The proposed method is preferable, It saves a lot of cost, assumed labor rate of $8 per hour.