Capacity and Queuing-Il Recitation Feb 17-18, 2011 AMEX Travel Lecture Wrap-Up . Queueing psychology - potentially cheap alternative to capacity expansion ‘Human’ servers are not machines . Unpredictable Variab! is expensive - require lower uti n . Prioritize Management Levers - Queueing Analysis! . Pool servers whenever you can! Scab Agenda + AmEx Takeaway + Build-up Diagrams + Process Flow Analysis + Any remaining Queuing Questions ayo fil AmEx Indiana BTC Wait Time vs. Staffing (utilization) ssa [a at a a at at a oa — soll — eal — oud aed oa ac oad a0 aaj 2 {am — aor] — too] — acd —oeel are na] — noo] to] Se] | asoes|toored se] bs — on al a1 on] — aol — aa Ge] sttes| tore race sros| —coy ual orl or] ea] en & ryPredictable vs. Unpredictable Main Queuing Insight Variability capacity Usilization, P=A/NXp Utilization + The relationship between waiting time and capacity utilization is strongly non-linear! ° “0 109 150 10 a Capacity Tradeoff : Congestion Analysis Finished server, machine work or [4+ service facility | 1 too high: Customers or Jobs arrive Capital expenses Labor expenses Resource waste Environmental damage Cash flow issues ae CAPACITY cost ce) Sos L tevel/Queue 2. Arrival rate (1EIAD it ngth Service rate per s re acer, ri F 2 Brand damage W Waiting time ‘A. Inter-arrival time distribution + Customer dissatisfaction Cc Cycle time S Service time distribution + Lost sales Py Probability queue is full N Number of servers 2 heonabeent R GuouolButfer capacity High turnoverInventory Buildup Diagram: Congestion Analysis Tools Airline Check-In Problem Build-Up Diagrams Queuing Theory The check-in counter of an airline can service 6 people/ minute. z Tee 5 Pos Assume that 1 person arrived per minute between 9:00 and 9:15. + Predictable Variability| | + Unpredictable Variability ACSTa Ta ube Onn aa neacis ct anivenletenas + A(t)- p(t) > 001 * Md <1 only Then, from 9:15 until 9:30, 8 people arrived per minute. + Short Run Analysis + Long Run Analysis From 9:30 until 9:50, 4 people arrived per minute, + Variable rates o.k. + Fixed rates only No one arrived after 9:50 AM. Poa aa PET aac caene ie uth Please draw the queue buildup diagram for this scenario. continuous and inter-arrival and service deterministic time distributions Today's Focus Inventory Buildup Diagram: 4 Inventory Buildup Diagram: Airline Check-In Problem Airline Check-In Problem actA ayentory Buldap Diagram Part mi The airline now caps the number of people who can wait in line at 30 (by offering a special check in process to all people beyond a certain point in line). Draw the inventory buildup diagram for this scenario.Inventory Buildup Diagram: Airline Check-In Problem Part B Inventory Buildup Diagram The E51 Elevator Bulldup Diagram for 1 Lobby oe The E51 elevator The lobby of E51 has an elevator that arrives every four minutes beginning at 9 a.m. The elevator can hold 10 people. Throughout the day, again beginning at 9 a.m., a person arrives in the lobby every minute to ride the elevator. At 10. a.m,, a class of 60 students lets out into the lobby. 80% of them wish to take the elevator. However, every two minutes ‘one of them gives up and takes the stairs. Please draw the inventory buildup diagram for people in the lobby from 9 a.m. to 11 a.m. Overnight Package Service arrive 24h a day at its national hub, where tricks, each eapable of holding 7000 packages. The tucks transport the packages transports the packages tothe night (6pm-Sar, howev of 5000 parcelsihour is two 12shour shits forts sorting center: the dey shit stars et 6am has the st amount of employees and ean process Up to 20,000 parcela/hour. The night shifts smaller and can process Upto 10,000 parcel/nour from 8pm-fam. ‘alr landings are slower, resulting in an average Draw the Inventory build-up diagram for his scenario,Overnight Package Service Overnight Package Service “Tho total et 50,000 pare 03 ofthe unloading zone atthe sorting contr Is designed to store upto ucks had fo walt when the unloading zane i fal. What ate the effects? graeme sky Overnight Package Service Overnight Package Service “Throw solutions proposed, 4. Increase the unloading storage area to store an addtional 15K 2. Run thee shilts:2 day shits (8am-pm and 4pm-tOpm) processing 20K parcelsthour and 4 ‘ew night shift (10pm-dam) processing {0K parceleinour ‘3, Move tho frst shit to 6am-Spm and second shift to 6pm-Sam Diseuss the effects ofthese solutions using the inventory buli-up diagramOvernight Package Service i BAN posts [Total Demand 1400[__1400] [Total Production 720] 720] Begin inventory 200] 409] Unmet Demand 430280] be 34,3%| 20.0% McDonald’s Example Demand fer burger patties in McDonald on a holiday weekend during lunch hot + 12:15-12:25: 60 patties per minute + 12:25412:35: 20 patties per minute + 12:35-12:45: 60 patties per minute Maximum patty production Is 24 patties per minute and assume that the production occurs continuously rather than in batches. Also assume that burgers must be thrown out if they are not sold within 10 minutes. Draw the Inventory build-up diagram when the starting inventory at 12:18 is (a) 200 and (b)400 How Best can you get? [ietlbemand i209 Total Production | 720 Begin inventory | 560) [Unmet Demand |__a2] be BH] Or start at @ high inventory level at 42:18 and vary production rate in the first 10 minutesProcess Flow Analysis: Ceramics Line Consider the following three stage production process of glass. ceramics, which is operated as a worker-paced line. pa Finished Components6 min/unit 5 min/unit 4 minfanit Finishes 1 2 | 3 Rework Process Flow Analysi Ceramics Line General Analysi Operation 4: A, unit/hr, W,=10 unit/hr, p= A,/u,= 5/10 .8" A, = 0.8" 5 unit/hr = 4 unit/hr, y,=12 unit/hr, 42 = 113 . ).75* 4 unit/hr = 3 unit/hr, p,=15 unit/hr, = Aglttg=3/15= 1/5 Rework: A, *h,* 0.25%A, + 1/6* A, = 0.2*5 unit/hr+ 0.25°4 unit/hr + 4/6" unit/hr = 2.5 rework unit/hr, 1q=6 rework units/hr Pa Aglttg=2.5/6= 5/12 A. p=Alp=1i3 B. Compare p's, Operation 1 is the Bottleneck! ¢. 10 Unitfhour Process Flow Analysis: Ceramics Line ‘The process Is experiencing severe quallty problems related to insufficiently trained Workers, Specifically, 20 porcent of the parts going through Operation 1 are badly processed by the operator. Rather than scrapping the unit, It is moved to a highly skilled rework ‘operator, who can correct the mistake and finish up the unit ‘completely within 10 minutes. ‘The same problem occurs at Operation 2, where 25 percent of the parts ‘are badly processed. Operations 3 also has a 1/6 ratio of badly processed parts, All badly processed parts require 10 minutes to correct and finish up the unit completely. A. Whatis the utilization of Operation 2 if work is released into the process at a rate of 5 units/hour? B, Where In the process is the bottleneck? Why? 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Ss hétes Ts Smodh out poldin _— Goss U Fest ty (esp a Car moe Conlin a. by L setup floes ih CostsMIT Sloan School of Management 15.761 Introduction to Operations Management Spring 2011 Case: MGH-Pre-Admission Testing Area (PATA) Case Analysis - Team Assignment Note to Studen Hand in one paper copy of the write-up for each student group at the beginning of the class on 23 Feb (24 Feb for Sections B & C). Your paper should provide answers to the specific case questions listed below. The answers must be less than 4 pages in length (excluding appendices) with font size of 12. Every graph or table/spreadsheet showing the results of computations must be accompanied by both a clear desripiof- of What atT-mambers shown represent qualitatively, and an exhaustive explanation of how they are computed, including relevant mathematical formulas or algorithms. ‘Our general policy for this class is that when preparing cases and assignments you should not receive any related input from anyone who has already participated in a faculty-led discussion of the same material, be it at Sloan or another school. When preparing any graded assignment you may not consult or use material not already included in the course packet or posted on the course webpage, unless this has been explicitly authorized by the instructor. PATA Case Question; 1. Construct a process flow diagram of the PATA visit from a patient's perspective. Calculate the capacity and utilization rate at each step in the process. 2. Use capacity analysis tools (build-up diagrams or/and queuing) to decide if and where there is a bottleneck in the clinic. Ifa bottleneck does indeed exist, how long do patients wait as a result of the bottleneck? (As an approximation, assume that all appointment slots were filled and patients arrived on time) 3. Evaluate the three Task Force diagnoses - not enough time between appointments, not enough rooms, not enough physicians. Are these diagnoses valid? If so, are they primary contributors to long patient wait times? Why or why not? 4, What factors contribute to variability in PATA process flow and what control, if any, does the clinic have to eliminate it? 5. 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