# Assumptions & sources

Everything in this project is synthetic. Fernbrook Card Services is fictional, and the process is an
outside-in sketch of a typical card dispute workflow, not a description of any real issuer. The
parameters below live in `python/dispute_model.py` and `python/simulate_future_state.py`; change them
there and rerun the pipeline.

## Current-state model

| Parameter | Value | Why |
|---|---|---|
| Cases | 1,200 over 26 weeks from Mon 2026-01-05 | Enough volume for weekly control charts (about 46 cases a week) |
| Seed | 2027 | Reproducible output |
| Channel mix | phone 46%, app 30%, web 16%, branch 8% (targets) | Phone-heavy, typical of disputes raised by worried customers |
| Dispute types | fraud 30%, not received 20%, not as described 17%, duplicate 12%, incorrect amount 11%, cancelled recurring 10% | Illustrative mix |
| Incomplete intake | phone 45%, app 24%, web 30%, branch 36% | Free-text channels miss more required details |
| Second document request | 30% of incomplete cases | Customer sends some but not all documents |
| Wrong category at triage | phone 18%, app 9%, web 11%, branch 15% | Category chosen from intake notes |
| Chargeback re-keying error | 6% | Manual entry into the network form |
| Customer unreachable at notification | 5% | Second notification attempt |
| Withdrawn by customer | 7% | Merchant refunds before investigation |
| Queue waits (median, lognormal) | triage 20 h, document request 8 h, investigation 40 h, provisional credit 6 h, chargeback 24 h, final notice 16 h | Calendar hours; investigation is the scarce skill |
| Customer document wait | median 96 h (first request), 72 h (second) | |
| Merchant / network response | uniform 8 to 45 days (fraud: 5 to 30) | Public merchant guides describe response windows of roughly this length; network rules vary by reason code, so this is not modelled in detail |
| Special cause | week 14 investigation queues × 2.2 | Planted analyst shortage, so the control chart can be checked against a known answer |

## Future-state levers (full effect)

| Lever | Effect | Note |
|---|---|---|
| Guided digital intake | incomplete × 0.40 (app, web), × 0.65 (phone, branch); second requests × 0.5; +1.5 min phone and branch intake | The checklist costs agent time |
| Rule-assisted triage | wrong category × 0.40 | |
| Low-value fast track | non-fraud, under $50, tenure ≥ 1 year: credit at triage, no chargeback | Issuer absorbs the amount |
| Visual management board | internal queue waits × 0.75; week-14 slowdown 2.2× → 1.4× | Largest single assumption; tested at half effect too |
| Pre-filled chargeback form | re-keying errors × 0.25; −4 min per filing | |

The "half effect" scenario moves every multiplier halfway back towards 1.0, as a sensitivity check.

## Cost assumptions (illustrative only)

- Loaded labour cost: $45 per hour, used only for the fast track break-even.
- Productive hours per FTE per year: 1,650.
- Annualized figures multiply the 26-week results by 2.

## Sources

- Financial Consumer Agency of Canada, *Supervisory Highlight: Thematic Review on Complaint Handling*:
  banks must deal with complaints within a maximum of 56 days, the period cannot be paused, and one
  bank's alert triggered on day 55.
  https://www.canada.ca/en/financial-consumer-agency/programs/research/fcac-supervisory-highlights-thematic-review-complaint-handling.html
- Financial Consumer Agency of Canada, news release, June 23, 2026: revised Guideline on
  Complaint-Handling Procedures for Banks ("Banks may not pause the 56 day period").
  https://www.canada.ca/en/financial-consumer-agency/news/2026/06/financial-consumer-agency-of-canada-publishes-revised-guideline-on-complaint-handling-procedures-for-banks.html
- ASQ glossary, *Eight wastes* (defects, overproduction, waiting, non-utilized talent,
  transportation, inventory, motion, extra-processing; mnemonic DOWNTIME).
  https://asq.org.in/glossary/quality/E/eight-wastes/
- Process cycle efficiency = value-added time ÷ lead time (common Lean definition).
- XmR (individuals) chart limits = mean ± 2.66 × average moving range (standard SPC constant).

Treating a card dispute as a complaint under the 56-day rule is a modelling choice for this study,
not a legal interpretation.