Megacard Corporation

9 Pages Posted: 21 Oct 2008

See all articles by John L. Colley

John L. Colley

University of Virginia - Darden School of Business

Edward W. Davis

University of Virginia/Darden Business School

Abstract

This case requires a decision on the possible consolidation of three Midwest business-travel centers. Significant cost savings in service representatives can be achieved by combining the front-end (booking) operations. The sensitivity of cost to service-productivity levels and customer waiting time is also explored. This case and related materials can be used as part of the Workforce Planning Module.

Excerpt

UVA-OM-0740

MEGACARD CORPORATION

In January 1992, Bill O'Brien, vice president of the Megacard Corporation's Business Travel department, was reviewing his department's 1991 results, which were generally encouraging. Although several long-established Business Travel Centers had not yet made a profit, new ones had opened and were doing well.

The Business Travel Department's sales were on the increase; they had grown by 30% in 1991 and had recently been forecast to double by the end of 1995. O'Brien wondered how Megacard could effectively manage all the business at the door. He was sure the parent company would advance funds for growth, but he was bothered by the broad distribution of client demand. Some of it came from regions beyond the reach of his established Business Travel Centers (BTCs)—the thriving centers and the flagging ones.

O'Brien did not want to build and hire when he faced chronic overstaffing at some BTCs and periodic seasonal overstaffing at all of them. A strong sense of paradox plagued him: He needed more people to expand operations, but he already had too many people maintaining them. As he considered possible corrective strategies, he tried to foresee the effects they would have on the quality of service. Quality was the life of his department; He had no intention of sacrificing it or even experimenting with it.

The Business-Travel Industry

. . .

Keywords: productivity, quality, service operations, mangement of, waiting-line analysis

Suggested Citation

Colley, John L. and Davis, Edward W., Megacard Corporation. Darden Case No. UVA-OM-0740, Available at SSRN: https://ssrn.com/abstract=1282460 or http://dx.doi.org/10.2139/ssrn.1282460

John L. Colley (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=4273

Edward W. Davis

University of Virginia/Darden Business School ( email )

445 Ivy Farm Dr.
Charlottesville, VA 22901
United States
434-242-6919 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/davis.htm

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