Chapter 18

Management of Waiting Lines

Waiting lines occur when there is a temporary imbalance between supply (capacity) and
demand. Waiting lines add to the cost of operation and they reflect negatively on customer
service, so it is important to balance the cost of having customers wait with the cost of providing
service capacity.

Queuing Theory – is a mathematical approach to the analysis of waiting lines.

Managerial Implications of Waiting Lines

1. The cost to provide waiting space.

2. A possible loss of business should customers leave the line before being served or refuse
to wait at all.
3. A possible loss of goodwill.
4. A possible reduction in customer satisfaction.
5. The resulting congestion that may disrupt other business operations and/or customers.

Goal of Waiting-Line Management

The goal of waiting-line management is to minimize the sum of two costs: customer
waiting costs and service capacity costs.

Characteristics of Waiting Lines

1. Population source

Infinite-source situations – customer arrivals are unrestricted

Finite-source situation – the number of potential customers is limited

2. Number of Service (Channel)

Channel – a service in a service system

 3. Arrival and service patterns
Waiting lines are a direct result of arrival and service variability. The most
commonly used models assume that arrival and service rates can be described by a
Poison distribution or, equivalently, that the interarrival time and service time can be
described by a negative exponential distribution.
4. Queue discipline (order of service)
Queue discipline – the order in which customers are processed.

Measures of Waiting-Line Performance

1. The average number of customers waiting, either in line or in the system.

2. The average time customers wait, either in line or in the system.
3. System utilization, which refers to the percentage of capacity utilized.
4. The implied cost of a given level of capacity and its related waiting line.
5. The probability that an arrival will have to wait for service.

Queuing Models: Infinite Source

1. Single server, exponential service time.

2. Single server, constant service time.
3. Multiple servers, exponential service time.
4. Multiple priority service, exponential service time.

Single Server, Exponential Service Time

The simplest model involves a system that has one server (or a single crew). There is no
length of queue.

Multiple Server, M/M/S

A multiple-server system exist whenever two or more servers are working independently
to provide-service to customer arrivals.

1. A Poison arrival rate and exponential service time.

2. Servers all work at the same average rate.
 3. Customers form a single waiting line (in order to maintain first-come, first-served
processing).

Cost Analysis

The design of a service system often reflects the desire of management to balance the
cost of capacity with the expected cost of customers waiting in the system.

The optimal capacity (usually in terms of number of channels) is one that minimizes the
sum of customer waiting costs and capacity or service costs. Thus, the goal is

Minimize Total cost = Customer waiting cost + Capacity cost

Multiple-Priority Model – customer are processed according to some measure of importance

Constraints Management

Managers may be able to reduce waiting times by actively managing one or more system
constraints. In short term, the facility size and the number of service are fixed resources.

1. Use temporary workers

2. Shift demand
3. Standardize the service
4. Look for a bottleneck

David H. Maisler on the Psychology of Waiting

 Occupied time feels shorter than unoccupied time

 People wants to get started
 Anxiety makes waits seem longer
 Uncertain waits are longer than known, finite waits
 Unexplained waits are longer than explained waits
 Unfair waits are longer than equitable waits
 The more valuable the service, the longer the customer will wait
 Solo waits feel longer than group waits
Managing Waiting Lines at Disney World

1. Provide distractions
2. Provide alternatives for those willing to pay a premium
3. Keep customers informed
4. Exceed expectations
5. Other tactics

Operation Stategy

Managers must be carefully assess the costs and benefits of various alternatives for
capacity of service system. Working to increase the processing rate may be a worthwhile option
instead of increasing the number of servers. One important factor to consider is the possibility of
reducing variability in processing times by increasing the degree of standardization of the
service.

Other approaches might involve efforts to shift some arrivals “off-times” by using
reservations systems, “early-bird” specials, senior discounts, or some of the approaches used by
Disney to manage customer waiting.