McGraw-Hill Education Copyright 2017 by M cG raw-Hill Education. All rights reserved.

Learning Objectives
1. Understand the characteristics of service processes
2. Analyze simple service systems
3. Understand waiting line (queueing) analysis

SERVICE PROCESSES
Chapter 7 7- 2

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Operational Classification of Services Service-System Design Matrix

Service organizations are classified according to the
customers they service and the service they provide
to those customers

Customer Contact Creation of the

service

Service systems with a

The physical presence high degree of The work process
of the customer in the customer contact are involved in providing
system more difficult to control the service itself

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Virtual Services Service Blueprinting and Fail-safing

¨ Web-platform businesses – Facebook, Uber, ¨ The standard tool for service process design is the
flowchart
Alibaba ) they connect the buyer and the seller ¤ Called a service blueprint
(they don’t sell their products) ¨ A unique feature of the service blueprint is the
¨ Non-platform Web businesses – Netflix HBO, distinction made between the high customer contact
Walmart (they sell their own products as well) aspects of the service and those activities that the
customer does not see
¤ Made with a “line of visibility” on the flowchart
¨ Fail-safing involves using the service blueprint to
identify opportunities for failure and then establishing
procedures to prevent mistakes from becoming defects
(poka-yokes)

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 Service Organization Design Waiting Line Problems (Queues)
¨ Services cannot be stored in inventory ¨ A central problem in many service settings is the
¨ In services, capacity becomes the dominant issue management of waiting time
¤ Too much capacity leads to excessive costs ¤ Reducing waiting time costs money, but raises customer
satisfaction and throughput
¤ Insufficientcapacity leads to lost customers
¨ Waiting line models provide a powerful ¨ When people waiting are employees, it is easy to
mathematical tool for analyzing many common value their time
service situations ¨ When people waiting are customers, it is more
difficult to value their time
¤ Lost sales is one value (often a low estimate)

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Arrival and Service Profiles Practical View of Waiting Lines

The number of arrivals over Customers demand varying
the hours that the service amounts of service, often
system is open exceeding normal capacity

Waiting Line
Arrivals often Factors
vary greatly
over a time Service
period We can control arrivals We can affect service time by
capacity is
usually fixed • Short lines using faster or slower servers,
• Specific hours for specific customers or by using creative methods
• Specials

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Operations and SCM in Practice Managing Queues

EFFECTIVE MANAGEMENT OF QUEUES DURING BOARDING CAN INCREASE AIRLINE
BOTTOM LINE Segment the customers

An important question for airlines is “What is the

Train your servers to be friendly
best way to board passengers?”Avoiding queues
and getting passengers on a plane quickly can
greatly affect an airline’s costs. Southwest says
Inform your customers of what to expect
that if its boarding times increased by 10 minutes
per flight, it would need 40 more planes at a cost Try to divert the customer’s attention when waiting
of US$40 million each to run the same number of
flights it runs now.

Encourage customers to come during slack periods

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 Queuing System Components Queuing System Analysis
Queuing Systems essentially consists of three major components
1) Source Population and Customer Arrivals
a) Source Population - who are your customers?
n Population size – finite or infinite?

b) Customer Arrivals
n Arrival Rate Characteristics
n Random; Exponential and Poisson Distributions
n Constant rate
n Customer Arrival Characteristics
n Arrival patterns (steady or seasonal)
n Size or arrival rates (individuals or groups)
n Degree of patience (will they wait?)
Service System 7- 13 7- 14

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Queuing System Analysis Waiting Line Models

2) Service Systems
(a)
a) Waiting Lines Customer
n Line Length, Number of Lines, Queue Discipline (Priority Rules) population
b) Servers and Service Rate (Time) Source
Service system
n Service Rate Characteristics
n Random; Exponential distribution
n Constant rate; machine controlled operations Waiting line
(d) Service Served
c) Service Line Structures line customers
Single channel: single phase or multiphase (c) structures (e)
n (b)
Multichannel: single phase or multiphase Priority Service
n Arrival
Mixed structures rule Time
n Rate
3) Condition of Exiting Customers
a) Low Probability of reservice
b) High Probability of reservice
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a) Customer Population Sources Customer Arrival Factors

¨ The source of customers to the waiting
line system, and it can be either Population Source
infinite or finite.

¨ Infinite population source: a large

number of potential customers that it is
always possible for one more customer
Finite Infinite
to arrive to be served; that is the
whole town or geographic area. Example: a Example: a bank and a Balking
repair person in grocery store.
¨ Finite population source: a specific, a shop who is
countable number of potential responsible for
customers. a fixed # of
machines to Reneging
work on.
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 (b) Customer Arrival Rate (b) Customer Arrival Rate
¨ The frequency at which customers arrive at a waiting line ¨ Poisson Probability Distribution:
according to a probability distribution.
¤ Generally, arrival of customers into the system is a random ¤ Probability of n customers arrive when average (mean)
event. arrival rate is l customers per unit time within a time
¤ Frequently arrival pattern is modeled as a Poisson process length (T):
where customer arrivals occur continuously and
independently at a constant average rate, l number of (l T )n
customers per unit time. P T(n) = e -lT
n!
¨ Poisson Process Properties:
¤ The number of arrivals in any time interval is independent ¨ Mean and Variance of Poisson Distribution over any
of the number of arrivals in any other time interval. time interval T is equal to the rate, lT.
¤ The probability of an arrival in an interval is the same for
all equal-size intervals

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(b) Customer Arrival Rate (Cont.) Arrival Distributions - Poisson

¨ Describes the number of arrivals (n) in some time period (T)
If the Arrival rate = 2/hour
¨ E.g. With a mean arrival rate of three per minute (λ=3),
What is the Probability that 4 customers will what is the probability of exactly five (n=5) arrivals in the
arrive within a one-hour period? next minute?

" #$!
[2(1)]4 𝜆𝑇 𝑒
P 1(4) = e -2(1) 𝑃! 𝑛 =
4! 𝑛!

3×1 & 𝑒 #'×%

𝑃% 5 =
) +,
5!
' *
=
%-.
= 0.101
= 10.1%
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Arrival Distributions - Exponential Arrival Distributions - Exponential

¨ The exponential distribution (also known as ¨ Properties of Exponential Distribution
the negative exponential distribution) is ¨ Let 𝜆 denote arrival rate per unit time
the probability distribution that describes the time ¨ Mean = 1/ 𝜆
between events (arrivals) in a Poisson process
¨ Variance = 1/(𝜆 2)
¨ Describes the probability distribution of time
between arrivals (inter-arrival times)
¨ It has the infamous memoryless property 𝑃𝑟𝑜𝑏. 𝐷𝑒𝑛𝑠𝑖𝑡𝑦 𝐹𝑢𝑛𝑐𝑡𝑖𝑜𝑛: 𝑓 𝑡 = 𝜆𝑒#$/
¤ Itdoes not matter when last arrival happened, Distribution Function: Area = 𝐹 𝑡 = 1 − 𝑒#$/
the probability of a customer arriving in the next
time unit is always the same
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 Arrival Distributions - Exponential Queuing System (Waiting Line) Factors

¨ For any given 𝜆 , in order to find the probability that the ¨ Length – how much
next customer arrival will happen within a specified period waiting room space is
of time t, use F(t) available?
𝑓 𝑡 = 𝜆𝑒#$/ ¨ Number of lines – how
many servers are
𝐹 𝑡 = 1 − 𝑒#$/ working?
¨ Queue discipline –
For 𝜆 = 1, P (an arrival in the next t mins) priority rule or set of
= 1 − 𝐹 𝑡 = 𝑒 !"# = 𝐹 𝑡 = 1 − 𝑒 !"# rules that determine
the order of service
for customers who are
waiting in line

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(c) Priority Rule (d) Service Line Structure

¨ Queue discipline (PRIORITY RULES) – how do new arrivals ¨ Service Line Structure – what does the process look like?
enter the line? How do you decide which customer to
serve next?
¨ The service facility can be classified in terms of # of
¨ Most common queue discipline is first come, first service channels and # of service phases.
served (FCFS) (We will consider this discipline in our
models.)
¨ Channels: # of parallel servers for serving customers

¨ Other disciplines assign priorities to the waiting units and ¨ Phases: # of servers in sequence a customer must go
then serve the unit with the highest priority first. through

Copyright © 2013 McGraw-Hill Ryerson Limited 7- 27 Copyright © 2013 McGraw-Hill Ryerson Limited 7- 28

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(d) Service Line Structure (Cont.) (d) Service Line Structure (Cont.)
Single channel, single phase Multiple channel, single phase
(We will study this scenario in detail.) (We will study this scenario in detail.)

Service
facility 1
Service
facility

Service
E.g. One-person barber shop, facility 2
A postal office with only one
postal clerk working
E.g. Bank tellers’ windows
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 (d) Service Line Structure (Cont.) (d) Service Line Structure (Cont.)
Multiple channel, multiple phase
Single channel, multiple phase
(We will NOT study this scenario in detail.)
(We will NOT study this scenario in detail.)

Service Service
facility 1 facility 3

Service Service
facility 1 facility 2

Service Service
E.g. Car wash, facility 2 facility 4
Hospital admission with a single person in the counter
and a single doctor
E.g. Hospital admissions with several persons in the
counter and several doctors

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(d) Service Line Structure (Cont.) Service Time Distribution

¨ In a college registration process, several department heads have to approve
an individual student's semester course load. What is the queuing system line ¨ Constant
structure?
¤ Serviceis automated and not customized to individual
A. Single channel, single phase
B. Single channel, multiphase customers (automatic car wash)
C. Multichannel, single phase
D. Multichannel, multiphase ¨ Variable
E. None of the above
¤ Service is provided by humans
¨ Buying food at a large food store with multiple checkout counters features ¤ Can be customized to individual customers
which type of queuing system line structure? ¤ Described using exponential distribution
A. Single channel, single phase
B. Single channel, multiphase
C. Multichannel, single phase
D. Multichannel, multiphase
E. None of the above

Copyright © 2013 McGraw-Hill Ryerson Limited 7- 33 7- 34

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Service Time Distribution (e) Service Time (Cont.)

Service ¨ Service time distribution
Pattern ¤ A distribution commonly used to describe random service time
is the exponential distribution
¨ E.g. Probability that a customer requires less than time t
for finishing the service when service rate is µ (average
Constant Variable # of customers served per unit of time). Defining T as
the time it takes to serve a customer, P(T ≤ t) = 1 – e-µt
Example: machine Example: People
controlled operations, spending time ¨ Probability that a customer requires less than 0.167
such as vending shopping. hours (10 minutes) when the service rate is 3 customers
machines per hour
P (T ≤ 0.167 hr) = 1 – e -3(0.167) = 1 – 0.61 = 0.39
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 Some Specific Waiting Line Models Notation: Infinite Queuing: Models 1-3

l = Arrival rate
µ = Service rate
1
= Average service time
µ
1
= Average time between arrivals
l
Lq = Average number waiting in line

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Infinite Queuing Models 1-3 (Continued) Model 1: Single Channel and Exponential Service Time
Ls = Average number in system
(including those being served) average utilization of the system l
(probability that the server is busy and a r =
Wq = Average time waiting in line customer has to wait.) µ
Ws = Average total time in system
(including time to be served)
probability that no customer exists
l
in the system
p 0 = (1 - )
=
n Number of units in the system
µ
S = Number of identical service channels probability that exactly n
customers will be in the system l l n

Pn = Probabilit y of exactly n units in system p n = (1 - )( )

µ µ
Pw = Probability of waiting in line 7- 39

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Model 1: Single Channel and Exponential Service Time Model 2: Single Channel and Constant Service Time

average number of customers in average waiting time in line average number of customers in average waiting time in line
line (i.e., the customers in the
waiting line) line (i.e., the customers in the
Lq waiting line) Lq
l2 Wq = Wq =
Lq = l l2 l
µ (µ - l ) Lq =
Note the use of Little’s Law: 2µ ( µ - l )
Inventory=Throughput Rate*Flowtime.
Same here: Lq= l * Wq average number of customers in the average waiting time in the system
average number of customers in the system (i.e., the customers being (i.e., waiting and being serviced)
system (i.e., the customers being average waiting time in the system
serviced and in the waiting line)
serviced and in the waiting line) (i.e., waiting and being serviced)
l Ls
l Ls = Lq + Ws =
Ls = Ls µ l
µ -l Ws =
l

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 Model 3: Multiple Channel and Exponential Service Time Model 3: Multiple Channel and Exponential Service Time

average number of customers in average utilization of the system (probability that a server is busy)
average waiting time in line
line (i.e., the customers in the
waiting line, use Exhibit 7.12
instead of the following formula)
Lq 1 l
Wq = r= ´
lµ (l / µ ) s l s µ
Lq = p
( s - 1)!( sµ - l ) 2 0

probability that a customer arriving in the system must wait for service
average number of customers in the average waiting time in the system
system (i.e., the customers being (i.e., waiting and being serviced)
serviced and in the waiting line) sµ
Pw = Lq ( - 1)
l Ws = Wq +
1 l
Ls = Lq +
µ µ

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Waiting Line Model Notation Waiting Line Model Equations

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Question Bowl Question Bowl

If the service rate is 2 customers per hour, what is the If the arrival rate is 2 customers per hour, what is
“average service time” for this queuing situation? the “average time between arrivals” for this
a) 40.00 minutes queuing situation?
b) 0.5 hours a) 30.00 minutes
c) 0.0667 hours b) 0.6667 hours
d) 16% of an hour c) 0.0667 hours
e) Can not be computed from data above d) 16% of an hour
e) Can not be computed from data above
Answer: (b)
Answer: (a)
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 Example 7.1 Example 7.1 – Model 1: Simple Model

Western National Bank is considering opening a drive- 𝜆 15

¨
¨ Average utilization is rho (ρ) 𝜌= =
𝜇 20
= 75%
through window. Management estimates that customers
will arrive at a rate of 15 per hour, the teller staffing ¨ Average number in the line 𝜆- 15-
𝐿7 = = = 2.25
the window can serve customers at a rate of one every 𝜇(𝜇 − 𝜆) 20(20 − 15)
three minutes (20 per hour). is Lq
Average number in the 𝜆 15
¨ Management would like to know ¨ 𝐿8 = = =3
𝜇 − 𝜆 20 − 15
¤ Utilization rate of the teller system is Ls
¤ Average number in the waiting line 𝐿7 2.25
¨ Average waiting time in line 𝑊7 = = = 0.15 ℎ𝑜𝑢𝑟
¤ Average number in the drive-through system 𝜆 15
is Wq
¤ Average time in line
¤ Average time in the system, including service ¨ Average waiting time in 𝑊8 =
𝐿8
=
3
= 0.2 ℎ𝑜𝑢𝑟
system is W s 𝜆 15

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Example 7.1 – Excel Solution Example 1: (Model 1)

Assume a drive-up window at a fast food restaurant. Customers arrive
at the rate of 25 per hour. Only one employee works at the
restaurant. The employee can serve at the rate of one customer every
two minutes. Assume Poisson arrival and exponential service rates.

Determine:
A) What is the average utilization of the employee (probability that the
employee is busy and a customer has to wait)?
B) What is the average number of customers in line per hour?
C) What is the average number of customers in the system per hour ?
D) What is the average waiting time in line?
Excel: Queuing E) What is the average waiting time in the system?
Calculations F) What is the probability that exactly two cars will be
Instructor Slides
in the system?
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Example 2: Model 2 Example 7.3: Good application of Model 3

An automated pizza vending machine heats and
dispenses a slice of pizza in 4 minutes (constant service time) .
Customers arrive at a rate of one every 6 minutes with
the arrival rate exhibiting a Poisson distribution.
¨ Study this example to see how Exhibit 7.12 is used.
¨ Good application to see how to determine how
many servers should be in a system based on costs

Determine:

A) The average number of customers in line.

B) The average total waiting time in the system.

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 Computer Simulation of Waiting Lines Next Time

Some waiting line problems are very complex ¨ Test 1coming – Watch for Announcement on
Moodle.
• Servers with different capabilities, multiple customer types ¨ We have class after the exam, please attend
class
Equations assume that waiting lines are independent ¨ Read and Review today’s chapter, solve the

• When one service is the input to the next, we can no longer use the exercise problems
simple formulas ¨ Solve end of chapter suggested problems 16, 17
Some problems have conditions that do not meet the ¨ Read Chapter 10 Quality Management for next
requirements of the equations class
• Finite populations, specific arrival/service distributions

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