MGMT90141
Business Analysis and Decision-Making, Assignment-2
Semester 1, 2024
JB Hi-Fi’s Employee Scheduling Optimisation Problem
Instructor
Seminar Monday 6:15 pm
Group Members & Student IDs
(Group 16)
Word Count 4398 Words
MGMT90141 Semester 1, 2024 – Group 16 1
, Table of Contents
1. Introduction.......................................................................................................................... 1
1.1. Company Background...................................................................................................1
1.2. Competitive Landscape................................................................................................. 1
1.3. Comparison with the Good Guys.................................................................................. 1
1.4. Justification for Employee Scheduling Optimization................................................... 1
1.5. Optimisation using a Mixed Integer Linear Programming (MILP) Model...................2
2. Literature Review.................................................................................................................3
3. Methodology......................................................................................................................... 5
3.1. JB Hi-Fi’s Melbourne Central Store Information......................................................... 5
3.2. Assumptions.................................................................................................................. 6
3.2.1. Peak Hours and Customer Flow...........................................................................6
3.2.2. Estimation Customer Volume and Staff Allocation............................................. 7
3.2.3. Staff Categories and Workforce Composition....................................................10
3.2.4. Wages Paid......................................................................................................... 10
3.3. Constraints...................................................................................................................11
3.3.1. Employee Positions............................................................................................ 11
3.3.2. Job Responsibility.............................................................................................. 11
3.3.3. Working Days.....................................................................................................12
3.3.4. Working Times................................................................................................... 13
3.3.5. Retail Industry Hourly Pay Rate........................................................................ 14
3.3.6. Non-Negativity...................................................................................................15
3.3.7. Integer.................................................................................................................15
4.1. Implementation............................................................................................................15
4.1.1. Step 1 – Fully Understand the Optimisation Problem........................................15
4.1.2. Step 2 – Define the Decision Variables.............................................................. 15
4.1.3. Step 3 – Identify the Objective Function........................................................... 17
4.1.4. Step 4 – Identify the Constraints........................................................................ 18
4.2. Results......................................................................................................................... 22
4.3. Sensitivity Analysis.....................................................................................................23
5. Discussions.......................................................................................................................... 27
5.1. Advantages.................................................................................................................. 27
5.2. Limitations.................................................................................................................. 28
5.3. Recommendations....................................................................................................... 29
6. Conclusions......................................................................................................................... 30
7. Reference.............................................................................................................................31
Appendix 1 : Group Minutes of Meetings............................................................................34
Appendix 2 : Solver Decision Variable and Constraint Tables.......................................... 36
MGMT90141 Semester 1, 2024 – Group 16 2
,1. Introduction
1.1. Company Background
JB Hi-Fi, a leading Australian consumer electronics retailer, is known for its extensive
product range, competitive pricing, and focus on exceptional customer service (JB Hi-Fi,
2024). The Melbourne CBD store, situated in a high-traffic location, experiences significant
customer demand throughout the week. This high demand necessitates a well-oiled
operational machine to maintain JB Hi-Fi's reputation for excellent service and efficiency.
1.2. Competitive Landscape
The Australian consumer electronics market is fiercely competitive. JB Hi-Fi's primary
competitor, The Good Guys, operates with a similar business model and has a significant
presence in major cities like Melbourne. JB Hi-Fi boasts a stronger online presence, attracting
nearly 40% more website visitors than The Good Guys in December 2022 (as reported by
Channel News), maintaining efficient in-store operations remains crucial for a competitive
edge.
1.3. Comparison with the Good Guys
A recent report by Roy Morgan Research (January 2024) indicated that JB Hi-Fi enjoys a
slight edge over The Good Guys in customer satisfaction (58% vs. 55%). However, the report
also revealed that The Good Guys outperformed JB Hi-Fi in employee satisfaction (72% vs.
68%). This suggests that JB Hi-Fi might benefit from optimising its scheduling practices to
create a more balanced and employee-centric work environment, potentially reducing
turnover and enhancing customer service quality.
1.4. Justification for Employee Scheduling Optimization
Employee scheduling directly impacts customer service quality, operational efficiency, and
labour costs (key drivers for JB Hi-Fi’s success). Currently, the scheduling process might be
managed manually or with basic software, potentially leading to inefficiencies like:
During peak hours, insufficient staff can result in long wait times,
customer frustration, and missed sales opportunities (Shortell, 2010). A
Understaffing 2022 study by the National Retail Federation found that 61% of
customers abandon a purchase due to long wait times. This highlights
the potential financial loss JB Hi-Fi could incur due to understaffing.
MGMT90141 Semester 1, 2024 – Group 16 1
, During slower periods, overstaffing can result in increased labour costs
and reduced employee productivity (Shortell, 2010). A study by Kronos
Overstaffing Incorporated found that retailers can achieve a 5–10% reduction in
labour costs through optimised scheduling (Kronos Incorporated,
2023).
Employee Unbalanced schedules with undesirable shifts or unfair workload
Dissatisfaction distribution can negatively impact employee morale and retention
(SHRM, 2023). High employee turnover can lead to increased
recruitment and training costs for JB Hi-Fi.
1.5. Optimisation using a Mixed Integer Linear Programming (MILP)
Model
Developing an employee scheduling model for the JB Hi-Fi Melbourne CBD store using a
Mixed Integer Linear Programming (MILP) approach can address these challenges and
improve JB Hi-Fi's competitive edge. This model can consider various factors, such as:
Predicting and aligning staff levels with anticipated customer
traffic throughout the week. This data can be obtained
Customer Demand through historical sales data, customer foot traffic analysis,
and competitor trends.
Labour Cost Minimising overall labour expenses associated with staffing
the store
MGMT90141 Semester 1, 2024 – Group 16 2
Business Analysis and Decision-Making, Assignment-2
Semester 1, 2024
JB Hi-Fi’s Employee Scheduling Optimisation Problem
Instructor
Seminar Monday 6:15 pm
Group Members & Student IDs
(Group 16)
Word Count 4398 Words
MGMT90141 Semester 1, 2024 – Group 16 1
, Table of Contents
1. Introduction.......................................................................................................................... 1
1.1. Company Background...................................................................................................1
1.2. Competitive Landscape................................................................................................. 1
1.3. Comparison with the Good Guys.................................................................................. 1
1.4. Justification for Employee Scheduling Optimization................................................... 1
1.5. Optimisation using a Mixed Integer Linear Programming (MILP) Model...................2
2. Literature Review.................................................................................................................3
3. Methodology......................................................................................................................... 5
3.1. JB Hi-Fi’s Melbourne Central Store Information......................................................... 5
3.2. Assumptions.................................................................................................................. 6
3.2.1. Peak Hours and Customer Flow...........................................................................6
3.2.2. Estimation Customer Volume and Staff Allocation............................................. 7
3.2.3. Staff Categories and Workforce Composition....................................................10
3.2.4. Wages Paid......................................................................................................... 10
3.3. Constraints...................................................................................................................11
3.3.1. Employee Positions............................................................................................ 11
3.3.2. Job Responsibility.............................................................................................. 11
3.3.3. Working Days.....................................................................................................12
3.3.4. Working Times................................................................................................... 13
3.3.5. Retail Industry Hourly Pay Rate........................................................................ 14
3.3.6. Non-Negativity...................................................................................................15
3.3.7. Integer.................................................................................................................15
4.1. Implementation............................................................................................................15
4.1.1. Step 1 – Fully Understand the Optimisation Problem........................................15
4.1.2. Step 2 – Define the Decision Variables.............................................................. 15
4.1.3. Step 3 – Identify the Objective Function........................................................... 17
4.1.4. Step 4 – Identify the Constraints........................................................................ 18
4.2. Results......................................................................................................................... 22
4.3. Sensitivity Analysis.....................................................................................................23
5. Discussions.......................................................................................................................... 27
5.1. Advantages.................................................................................................................. 27
5.2. Limitations.................................................................................................................. 28
5.3. Recommendations....................................................................................................... 29
6. Conclusions......................................................................................................................... 30
7. Reference.............................................................................................................................31
Appendix 1 : Group Minutes of Meetings............................................................................34
Appendix 2 : Solver Decision Variable and Constraint Tables.......................................... 36
MGMT90141 Semester 1, 2024 – Group 16 2
,1. Introduction
1.1. Company Background
JB Hi-Fi, a leading Australian consumer electronics retailer, is known for its extensive
product range, competitive pricing, and focus on exceptional customer service (JB Hi-Fi,
2024). The Melbourne CBD store, situated in a high-traffic location, experiences significant
customer demand throughout the week. This high demand necessitates a well-oiled
operational machine to maintain JB Hi-Fi's reputation for excellent service and efficiency.
1.2. Competitive Landscape
The Australian consumer electronics market is fiercely competitive. JB Hi-Fi's primary
competitor, The Good Guys, operates with a similar business model and has a significant
presence in major cities like Melbourne. JB Hi-Fi boasts a stronger online presence, attracting
nearly 40% more website visitors than The Good Guys in December 2022 (as reported by
Channel News), maintaining efficient in-store operations remains crucial for a competitive
edge.
1.3. Comparison with the Good Guys
A recent report by Roy Morgan Research (January 2024) indicated that JB Hi-Fi enjoys a
slight edge over The Good Guys in customer satisfaction (58% vs. 55%). However, the report
also revealed that The Good Guys outperformed JB Hi-Fi in employee satisfaction (72% vs.
68%). This suggests that JB Hi-Fi might benefit from optimising its scheduling practices to
create a more balanced and employee-centric work environment, potentially reducing
turnover and enhancing customer service quality.
1.4. Justification for Employee Scheduling Optimization
Employee scheduling directly impacts customer service quality, operational efficiency, and
labour costs (key drivers for JB Hi-Fi’s success). Currently, the scheduling process might be
managed manually or with basic software, potentially leading to inefficiencies like:
During peak hours, insufficient staff can result in long wait times,
customer frustration, and missed sales opportunities (Shortell, 2010). A
Understaffing 2022 study by the National Retail Federation found that 61% of
customers abandon a purchase due to long wait times. This highlights
the potential financial loss JB Hi-Fi could incur due to understaffing.
MGMT90141 Semester 1, 2024 – Group 16 1
, During slower periods, overstaffing can result in increased labour costs
and reduced employee productivity (Shortell, 2010). A study by Kronos
Overstaffing Incorporated found that retailers can achieve a 5–10% reduction in
labour costs through optimised scheduling (Kronos Incorporated,
2023).
Employee Unbalanced schedules with undesirable shifts or unfair workload
Dissatisfaction distribution can negatively impact employee morale and retention
(SHRM, 2023). High employee turnover can lead to increased
recruitment and training costs for JB Hi-Fi.
1.5. Optimisation using a Mixed Integer Linear Programming (MILP)
Model
Developing an employee scheduling model for the JB Hi-Fi Melbourne CBD store using a
Mixed Integer Linear Programming (MILP) approach can address these challenges and
improve JB Hi-Fi's competitive edge. This model can consider various factors, such as:
Predicting and aligning staff levels with anticipated customer
traffic throughout the week. This data can be obtained
Customer Demand through historical sales data, customer foot traffic analysis,
and competitor trends.
Labour Cost Minimising overall labour expenses associated with staffing
the store
MGMT90141 Semester 1, 2024 – Group 16 2
