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Analysis of present system:

The capacity calculation using policy processing times given in the exhibit assumes
there is no time delay between two processes i.e., Distribution and Underwriting while
processing the requests, whereas there can be a delay. In the week ending September 6, 1991,
we see that the requests to be processed for RERUNs are much higher than the other type of
requests. This is due to the policy of following FIFOs with prioritizing RUNs and RAPs. This leads
to high turnaround time for a new RERUN request as the pile of RERUNs, RUNs, RAPs and RAINs
should be processed before the new RERUN request is processed.

Recommendations

The current system in which the requests are processed prioritize RUNs and RAPs over
RAINs and RERUNS. Since this leads to a state where there is a huge backlog of RERUNs to be
processed, which in turn affects the firm’s business as the agents turn to other firms when
renewals are delayed. This can be avoided by multiple ways which is listed below:

1. Prioritize RERUNs over RUNs/RAPs if needed:

The process can be tweaked in such a way that RERUNs are prioritized over RUNs/RAPs as
the RERUNs are 10 days before the anniversary date of the policy. This will lead to the reduction
of the proportion of the renewals that are late. At the same time, this will increase the average
time taken to process RUNs and RAPs compared to the earlier system or also it can lead to
increased backlogs of other requests. This will be the trade-off Manzana should be willing to
make to reduce the backlog of RERUNs.

2. FIFO without priority


FIFO can be followed without the priority. This results in an equal turnaround time for each
type of request. The backlogs for RERUNs will reduce, but the backlogs for RAPs and RUNs will
increase. Since Manzana are losing business due to the delay in processing RERUNs, this is a
viable option.

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