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Automated Call-Analyzers at Northeast Utilities Objectives: Northeast Utilities (NEU) is in the business of generating and distributing electricity to the customers in various North-eastern states in the USA. To address various issues related to customer service, NEU operates a full-fledged call center. To provide better training to its customer representatives, NEU records the chat of each customer call and use it extensively to analyze various customer service-related issues. Currently, NEU employs eight such call analyzers. The salary of each of these analyzers is $50,000, and historical trends show that on an average each analyzer gets 4% salary raise every year. Developments in data mining technologies have made it possible to use speech mining to analyze customer calls. NEU is planning to purchase such automated call analysis tool Callminer from CallMining Inc. The cost of Callminer is $800000, and annual maintenance cost for Callminer is $150000. If NEY deploys Callminer, it will need only one human call analyzer who will have $50000 annual salary with an average raise of 4% per year. Determine the payback period for CallMiner. Guidelines: Payback period is the time it takes to recoup the investment in CallMiner. To determine this, you have to compare the cumulative costs of both the options over the next few years (lets say seven years). The payback period is determined by the time when the cumulative costs of having CallMiner drops below the cumulative costs of having the other option. While doing this, do not forget our basic rule. First, enter all input numbers with their headings and subsequently, use these input numbers to build formulas using cell referencing.

Read this case, Refer the PDF file to get an idea of the final solution, create a new Excel file; yourFirstName_H4, enter data, and use cell referencing to get the final result similar to the PDF file

C D E | F | G | H I J K L M WIN- A B 1 NE Utilities Employee Option 3 # Employees 4 Salary $50,000 5 Raise 4% 4% Automation # Employees Salary $50,000 Raise MC Cost $800,000 Maint.Cost $150,000 Emp Cost MC Cost TC $50,000 $950,000 $1,000,000 $52,000 $150,000 $202,000 $54,080 $150,000 $204,080 $56,243 $150,000 $206,243 $58,493 $150,000 $208,493 Year Emp Cost Cum. Cost 1 $400,000 $400,000 2 $416,000 $816,000 3 $432,640 $1,248,640 4 $449,946 $1,698,586 5 $467,943 $2,166,529 Cum.Cost $1,000,000 $1,202,000 $1,406,080 $1,612,323 $1,820,816 15 Please, observe after four years, the cummulative cost of the Automation option is less than that of the employee option ($1698586) C D E | F | G | H I J K L M WIN- A B 1 NE Utilities Employee Option 3 # Employees 4 Salary $50,000 5 Raise 4% 4% Automation # Employees Salary $50,000 Raise MC Cost $800,000 Maint.Cost $150,000 Emp Cost MC Cost TC $50,000 $950,000 $1,000,000 $52,000 $150,000 $202,000 $54,080 $150,000 $204,080 $56,243 $150,000 $206,243 $58,493 $150,000 $208,493 Year Emp Cost Cum. Cost 1 $400,000 $400,000 2 $416,000 $816,000 3 $432,640 $1,248,640 4 $449,946 $1,698,586 5 $467,943 $2,166,529 Cum.Cost $1,000,000 $1,202,000 $1,406,080 $1,612,323 $1,820,816 15 Please, observe after four years, the cummulative cost of the Automation option is less than that of the employee option ($1698586)

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