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Opening:
A financial services company in the arbitrage business is facing a labour and staffing optimization issue. The company has a profitable business model with no competition but is struggling with how to best allocate the tasks among its staff. The company currently has 4 senior analysts, 3 junior analysts, and 1 admin. The activities involved in the business include an initial stage (20% of the work), a core stage (70% of the work), and a recommendation stage (10% of the work). The company is looking to find out how many junior analysts need to be added to free up capacity among the senior analysts, so they can focus on selling additional work.
Background:
The senior analysts are currently responsible for 60% of the initial stage, 20% of the core stage, and 80% of the recommendations. The junior analysts are responsible for 30% of the initial stage, 70% of the core stage, and 20% of the recommendations. The admin is responsible for 10% of the initial stage and 10% of the core stage but is not involved in any recommendations.
Analysis:
To determine the amount of work being done by the junior analysts, we can calculate the percentages as follows:
30% of 20% (initial stage) = 6%
70% of 70% (core stage) = 49%
20% of 10% (recommendation stage) = 2%
Adding these percentages together, we can see that the junior analysts are responsible for a total of 57% of the work. With only 3 junior analysts currently on staff, this means that each analyst is responsible for 19% of the total work for the firm.
Recommended Conclusion:
To bring the junior analysts to 100% capacity, we would need to add 2 more junior analysts. With 5 junior analysts on staff, the new constraint would be time management.
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By Vandana Gaur
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