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The Use of a Professional Relocation Service - Case Study Example

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The paper 'The Use of a Professional Relocation Service' is an amazing example of finance and accounting case study. The task of the moving project, as described in the brief provided by the director of the call center, was to have the entire office relocated to the new office after the close of business at 5:00 pm Friday…
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The Project as Planned: The task of the moving project, as described in the brief provided by the director of the call centre, was to have the entire office relocated to the new office after the close of business at 5:00 pm Friday, and be ready for normal operations by 9:00 am Monday. There were a number of constraints on the project plan. No work could be done Friday evening, before 12:00 pm on Saturday, or after 6:30 pm on any day. The vacated office must be left in a useable condition for another department. And most importantly, the budget is limited to ₤12,500, or half of what was earmarked for the use of a professional relocation service. The office comprises 12 cells of six work stations each, one cell of five work stations, and the contents of the director’s office. Each work station contained a desk with locking three-drawer desk pedestal, overhead hanging file cabinet, computer, printer, and telephone. In addition, each cell of work stations had three hanging file cupboards. The director’s office contained a work station of similar configuration, plus additional paraphernalia of the sort that usually accumulates in a manager’s office. To avoid unnecessary disruption, extra packing and unpacking, or loss or damage to the staff’s personal items, it was decided to simply exchange the existing, locked desk pedestals for the new ones in the new location, which would necessitate moving furnishings in both directions. Based on these requirements and the outcome of the test move conducted by Eric, the following plan was developed: 1. Move the odd five-station cell and the director’s office on Saturday afternoon. Return the new desk pedestals back to the old office location. 2. Move the remaining 12 identical cells to the new location on Sunday. Return the new desk pedestals back to the old office location. 3. Have the IT department reconnect and test the telephone and computer equipment in the new location. Based on the test move, the capacity of the company’s Ford Connect van is 29 containers and five desk pedestals – 31 containers if the passenger seat is used, but that would require the passenger to take his own car. A larger van from Wols Transport would contain the entire contents of a six-station cell, or 42 containers plus six desk pedestals. There are only 35 containers available at the office, so seven more would need to be hired; these can be obtained from Jango Moving with one week’s notice at a cost of ₤50 per week per 10 containers. The resources needed then would be: For Saturday 1. The company’s Ford van plus four internal employees (three warehouse plus one administrator), which would be sufficient to move the director’s office. 2. The 35 available containers (four more than needed to move the five-station cell). 3. One large van plus four workers from Wols Transport, which would be sufficient to move the five-station cell. For Sunday 1. Seven extra containers (10 to be hired) from Jango Moving. 2. Ian from IT to reconnect the computer and associated equipment. 3. Four large vans from Wols Transport, and a total of 13 of their employees (the four internal personnel can be assigned to one of their vans, with a Wols employee driving it). Time & Cost Estimates For the Saturday activity, the four internal employees and the company van would be detailed to move the director’s office, with the Wols van and employees working on the five-station cell. Because of the extra items in the director’s office, the estimated time for handling that was the same as the five-station cell. Saturday Packing and moving cell/office into van: 30 minutes. Driving to new location: 45 minutes. Off-loading and unpacking cell/office: 30 minutes. Loading new furnishings to be transferred back to old office: 18 minutes. Returning to old office: 27 minutes. Off-loading replacement furnishings: 18 minutes. Total time estimate, Saturday: 2 hours, 48 minutes (2.8 hours). Cost of company van = ₤0 Three warehouse employees x ₤25.00/hr x 1.25 x 2.8 hours = ₤262.50 One administrative employee x ₤35.00/hr x 1.25 x 2.8 hours = ₤122.50 Cost of Wols Transport van = ₤150.00 Four Wols workers x ₤20.00 + (₤24.00/hr x 2.8 hours) = ₤348.80 Total cost estimate, Saturday: ₤883.80 Wols Transport’s employees are only available for a maximum of three hours on Saturday, but since only the five-station cell’s new furniture needs to be returned to the old office, that can be handled by the internal staff using the Ford van, and Wols’ workers would not be needed after the cell is moved and set up. The Sunday activity could use the same workers and vehicles, plus the addition of some containers hired from Jango Moving and Ian the IT expert. One problem, however, is that the company’s Ford van only has the capacity to move 5/6 of a normal cell, which leaves two options: either to use it and move some cells piecemeal, or to hire additional vans from Wols capable of moving an entire six-station cell at once. Breaking up any of the work cells might cause disruptions to Ian’s work in reconnecting the equipment, and would require at least one extra trip by the company van, adding at least an hour and forty-five minutes to the amount of time needed on Sunday. So even though extra Wols vans would entail some additional costs, it would ensure the move could be completed on schedule and with a minimum of disruptions. The time and cost estimates for the Sunday activity are as follows: Packing and moving loads into vans: 30 minutes x 3 trips = 1 hour, 30 minutes (1.5 hours). Driving to new location: 45 minutes x 3 trips = 2 hours, 15 minutes (2.25 hours). Off-loading and unpacking loads: 90 minutes x 3 trips = 1 hour, 30 minutes (1.5 hours). Loading new furnishings to be transferred back to old office: 18 minutes x 3 trips = 54 minutes (0.9 hours). Returning to old office: 27 minutes x 3 trips = 1 hour, 21 minutes (1.35 hours). Off-loading replacement furnishings: 18 minutes x 3 trips = 54 minutes (0.9 hours). IT work proceeding as move is ongoing; Ian will need to be available 2 hours and 45 minutes after the work begins (or in other words, when the first load has arrived and been unpacked). Total time estimate, Sunday: 8 hours, 24 minutes (8.4 hours). Cost of Wols vans: ₤150.00 x 4 = ₤600.00 Three warehouse employees x ₤25.00/hr x 1.5 x 8.4 hours = ₤945.00 One administrative employee x ₤35.00/hr x 1.5 x 8.4 hours = ₤441.00 13 Wols employees x ₤20.00 + (₤24.00/hr x 8.4 hours) = ₤2,880.80 Extra containers from Jango Moving = ₤50.00 IT labor: 78 workstations/10 per hour x ₤50.00/hr = ₤390.00 Total cost estimate, Sunday: ₤5,306.80. The total cost estimate for the entire project is, therefore, ₤6,190.60. However, this does not take into consideration work breaks that must be provided to the workers on Sunday, since they are working in excess of eight hours. A one-hour break in the schedule adds an additional ₤452.00 in labour costs, for a final estimated total of ₤6,642.60. The Project as Executed: Beginning at 12:00 pm Saturday, the move was commenced with the transfer of the director’s office and the five-station cell as planned. The Wols vehicle and employees completed their part of the job on schedule at 2:48 pm, but the internal staff and vehicle did not finish until 4:22 pm. This resulted in an additional ₤215.88 in labour costs for Saturday. On Sunday, work commenced at 8:00 am and the time needed for each of the three round-trips (two cells being completely transferred each time) averaged 3 hours, 30 minutes for a total of 10.5 hours. Ian from IT was engaged from 10:00 am to 6:26 pm, for a total of 8.43 hours. Except for the project taking longer than estimated, which did create some additional issues with the security officer in the new location and the Wols Transport employees (discussed below), the move was completely relatively smoothly and the end result was that the office was indeed ready for normal business at 9:00 am Monday as required. Total labour costs for the internal employees on Sunday were ₤1,732.50, an increase of ₤346.50 from the estimate. Ian’s time spent was 0.63 hours longer than the estimate, which accounted for another ₤31.50 in costs. Because the project was finishing just at the time the building security was preparing to lock the building for the night – a circumstance he found quite annoying – he was paid an additional ₤25.00 to remain on duty for approximately 15 minutes extra, to allow us time to make one final inspection and ensure that the office was secure. A more serious problem arose with the Wols Transport employees, who are ordinarily not allowed to work more than eight and one-half hours in a day. After some discussion with the employees and the Wols management, it was agreed to pay them for the additional time at an overtime rate of ₤36.00 per hour. This resulted in another ₤936.00 in extra labour costs. The grand total of the costs for Sunday, then, were ₤7,950.60, making the total cost of the project ₤9,050.28 – more than what had been estimated, but still far below the amount budgeted. Assessment: All things considered the moving project was very successful, but it must be acknowledged that a large part of that success was due to good fortune. In the planning of the project, some Risk Management was applied in order to try to anticipate and have a solution for various problems that might have arisen. A matrix of possible risks, consequences and responses was prepared as part of the planning process in order to successfully respond to problems: RISK CONSEQUENCE(S) RESPONSE(S) One or more workers may be unavailable due to illness or other reasons. Steps in the moving process would take longer. Allow extra time in the schedule; make sure planned schedule does not use all the available time. Ian from IT might not be available due to unforeseen circumstances. Computers and other equipment could not be reconnected. Postpone the project – Ian is the only IT person available on weekends. The company van may suffer an accident or breakdown. Moving process would take longer because of vehicle out of service. Make sure other company van is ready to use if it is needed as a replacement. The Wols van may suffer an accident or breakdown. Moving process would take longer because of vehicle out of service. Make sure Wols has a replacement vehicle available if it is needed. One of the vehicles might get a parking ticket (as happened in the test move). At a minimum, extra costs to the budget. At worst, vehicle impounded or immobilized. Set aside part of budget to pay a parking fine if needed. Make sure spare vehicle is available, as above. Some furnishings or equipment might be damaged in the move and not be useable. Office would not be fully-ready for operations on Monday as required. Set aside part of budget for replacement of damaged items; delay in re-opening could be minimised, but not avoided. None of those risks manifested itself, which was the good fortune aspect of the project. What was not anticipated, however, was the much greater time required than was originally estimated, which resulted in extra costs. There was ample allowance in the budget for these costs, so the end result was a successful outcome, but the situation probably could have been avoided nonetheless. What seems to be the source of the problem is the information used from the test move to make the time estimates. Even though Eric noted that the employees took much longer than he thought necessary in that move, his actual results and suggested forecasts still were inaccurate. Noting the “lack of work ethic” Eric had complained about, it was decided to keep an administrative/supervisory person with the warehouse staff to hopefully enforce some discipline, despite the extra labour cost; this had mixed results, it seems. The discrepancies in the other time estimates were otherwise not Eric’s fault, but rather the result of two differences between the test move and the main project: 1. The parts of the office being moved in the test were not exactly like those that needed to be moved in the main event. 2. There were a larger number of people involved than in the test – any lack of ambition in two or three people during the test move would be multiplied by the larger number in the main move, which is exactly what seemed to happen. Additionally, some time was lost due to the waiting for the two lifts at the new location. The time factor of the lifts was considered in the original estimates, but thought to be relatively insignificant, and to compensate for it the vans staggered their trips by a few minutes so they would not be arriving all at once, which would force two crews to wait until the first two to arrive had finished. As it turned out, this was insufficient, resulting in extra time and costs. These things could have been better considered during the planning, possibly by including them in the risk assessment. In any case, the experience of this project will serve well to inform any similar activities in the future. Read More
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