Path: utzoo!utgpu!news-server.csri.toronto.edu!cs.utexas.edu!sdd.hp.com!caen!uwm.edu!rpi!bu.edu!telecom-request From: roy@alanine.phri.nyu.edu (Roy Smith) Newsgroups: comp.dcom.telecom Subject: Re: Why do Telcos Use Window Envelopes for Payments? Message-ID: Date: 21 Feb 91 20:23:37 GMT Sender: news@bu.edu.bu.edu Organization: Public Health Research Institute, New York City Lines: 52 Approved: Telecom@eecs.nwu.edu X-Submissions-To: telecom@eecs.nwu.edu X-Administrivia-To: telecom-request@eecs.nwu.edu X-Telecom-Digest: Volume 11, Issue 145, Message 3 of 7 This is having increasingly little to do with telephones, but it's a fun tangent, so what the heck? Besides, evaluating the cost of running a utility has always been fair telecom digest fodder, hasn't it? Let's start with some assumptions by lang@ibmpa.awdpa.ibm.com, namely that it takes two seconds to re-orient a mis-oriented piece of paper and that you have to do it with 30% of the envelopes you get. Do these assumptions justify Lang's statement that: > While not a large expense compared to the outrageous profit margins of > the operating companies, two full-time employees has *got* to cost > more than the difference between standard and window envelopes. Today's {NY Times} classified section has three ads for data entry clerks; two list salaries (one $7/hr the other $17k/year). At about 1900 hours per work year, $7/hr is 13.3k/yr, but my guess is that unionized telco employess make near the high end of the scale, so I'll take the $17k/yr as a reasonable figure. That's about $9/hr, which turns into costing the employer about $12/hr with benefits, or .33 cents/second. My King Printing and Stationary catalog has 3-3/8" x 6-1/2" envelopes as $11.19/500 for plain and $14.49/500 for windows, in 10-box lots. That's 2.24 and 2.90 cents per, respectively. Add 10% for inflation (it's a 1989 catalog) and you get 2.46 and 3.19, or an extra 0.73 cents for windows. I'll take a wild guess and say telco buys custom printed ones in billion lots for the same price I can buy stock ones in 5000 lots. To process ten envelopes, the clerk will, on average, have to re-orient three pieces of paper, at an added cost of six seconds, or two cents. To save those six seconds by using window envelopes, telco would have spent an extra 7.3 cents, putting them 5.3 cents in the hole on the deal. If the basic assumptions are true, then lang's claim is false; the people are cheaper than the envelopes. Of course, my estimate of the clerk's wages could be off by a lot, and maybe telco can buy envelopes a lot cheaper than I thought, but both would have to be wrong by factors of two (in opposite directons) to make it break even. Maybe you lose more than two seconds per re-orientation? Well, just to make things more interesting, I asked the controller here what he pays for both kinds of envelopes (he found researching this to be a nice diversion from doing our corporate taxes). To my surprise he said it doesn't cost them anything different for the two kinds. I find that hard to believe, but would be remiss if I didn't report the datum. Another tidbit is that while NYTel uses windows, Brooklyn Union Gas doesn't. Go figure. Roy Smith, Public Health Research Institute 455 First Avenue, New York, NY 10016 roy@alanine.phri.nyu.edu -OR- {att,cmcl2,rutgers,hombre}!phri!roy