Sensitivity of optimum workforce size to employee absenteeism in stochastic workload situations

This paper presents the results of a simulation model developed to explore the relationship between unit cost and a number of primary production variables for a large warehouse operation of a major national retailer. The output of the simulation model includes a plot of total cost per completed unit for each combination of workforce size. Results indicate that under the conditions studied the total cost per completed unit is not particularly sensitive to workforce size and absenteeism patterns, and therefore insensitive to traditional managerial measures (such as over-staffing) to reduce these unit costs. This result is counter-intuitive and leads to the conclusion that the “fine turning" of staff levels as currently being attempted is perhaps not necessary.