Abstract

http://ssrn.com/abstract=2336514
 


 



Staffing Service Systems When Capacity Has a Mind of its Own


Itay Gurvich


Northwestern University

Martin Lariviere


Northwestern University - Kellogg School of Management

Antonio Moreno


Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS)

October 5, 2013


Abstract:     
We consider what kind of compensation a service provider should offer when it allows its workers to determine their own work schedule. We focus on a setting in which the service provider has agreed to process a flow of transactions subject to some service level agreement. Hence, it must make sure it has enough staff in each time interval but cannot directly assign agents to time intervals. It must instead offer appropriate compensation terms in order to induce enough -- but not too many -- agents to choose to work. Such situations arise, for example, in work-from-home call centers. We examine what these terms look like. We first show that if the firm offers constant terms over periods with varying demands, low demand periods will be overstaffed. In effect, the firm cannot exploit the economies of scale one usually expects in service settings. The firm can correct for this by adjusting its per-transaction compensation or by limiting the number of agents that can sign up in each period. We show that capping the number of active agents is particularly effective when the firm must assure that the agents earn an adequate return in each period.

Number of Pages in PDF File: 34

Keywords: strategic servers, independent capacity, distributed systems, service operations

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Date posted: October 6, 2013  

Suggested Citation

Gurvich, Itay and Lariviere, Martin and Moreno, Antonio, Staffing Service Systems When Capacity Has a Mind of its Own (October 5, 2013). Available at SSRN: http://ssrn.com/abstract=2336514 or http://dx.doi.org/10.2139/ssrn.2336514

Contact Information

Itay Gurvich
Northwestern University ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
Martin Lariviere
Northwestern University - Kellogg School of Management ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
HOME PAGE: http://operationsroom.wordpress.com/
Antonio Moreno (Contact Author)
Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
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