ABSTRACT

This project work is titled “Application of multiple queuing model in evaluating the efficiency of
service in UBA bank”. The type of data used in this project work is primary data which was
obtained through direct observation on the arrival and service rate of customer at the UBA bank
Wushishi branch from 9.00am to 12.00noon the period of 7 day. A multiple queuing model was
applied in evaluating the pattern of the data. The result obtained shows that the arrival rate is
16.3 customer and the service rate is 16 customers. The result obtained showed that the
probability that the system is busy is 50.9%, the probability that there is no customer in the
system is 0.387, average number of customers in the system is 1 while the average time spent in
the system is 0.08849 hours.

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 CHAPTER ONE

1.0 Introduction

Gone are the days when bank accounts had relevance only for the people making huge savings or

borrowings. The present world is characterized by evolving financial institutions who have come

to shape our lives in more ways than once. The banking system has come to be an integral part of

today’s society. Either a person has a bank account or not, he/she cannot escape the presence of

the banking system.

Banking system in simple words refers to a chain of financial institutions that provide financial

services like deposits, loan, money transfer, etc. to individuals and institutions with interest as

the determining factor of the transaction. Banking system plays the role of an intermediary

between the ones saving and the ones who borrow money for investments (Olaniyi 2004)

The functions of the banking system can be classified into primary functions and secondary

functions. (Zeng, 2007)

Primary functions: The primary or banking functions include two components namely depositing

and disbursement of loans. The depositing function of the banking system has come to be highly

developed providing a range of deposit option. Some of the popular deposits are saving deposits,

fixed deposits, current deposits and recurring deposits. The disbursement of loans from the

capital of savings constitute the determinant for the bank’s earnings, as the loans disbursed are

charged with an interest rate levied to the borrowed amount. Some of the key loan advancements

include loans, cash credits, overdraft and discounting of the bill of exchange (Zeng, 2007).

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Secondary functions: Accompanying the primary functions are a pair of secondary functions

which the bank performs, namely agency functions and general utility functions. The agency

functions refer to services like funds transfer, cheque collections, portfolio management, etc.

performing the role of an agent to the customer. The general utility functions refer to the special

facilities or services which banking institutions provide, namely locker facilities, project reports,

foreign exchange, etc. Not all utilities are provided by every bank, their disposal depends on the

resources and nature of the banking institution (Zeng, 2007)

One of the serious classes of queuing systems that we all encounter in our daily lives is

commercial service systems, where customers receive service from commercial organizations.

Many organizations involve person-to-person service at a fixed location, such as a barber shop,

cafeteria, petrol pump and bank. Many commercial banks have done great effort to increase the

service efficiency and customer satisfaction but the most of them are facing a serious problem of

waiting line of customers.

In bank, the waiting line of customers appears due to low efficiency of the queuing system, it

reflects the lacking of the business philosophy of customer centric, low service rate of the

system. The waiting queues of the customer develop because the service to a customer may not

be delivered immediately as the customer reaches the service facility (Hillier and Lieberman

2007). Lack of satisfactory service facility would cause the waiting line of customers to be

formed. The only technique is that the service demand can be met with ease is to increase the

service capacity and increasing the efficiency of the existing capacity to a higher level. In the

following, to solve the problem of the long waiting lines of the customer is studied by means of

the queuing theory, the determination to reduce the time of customers waiting is obtained to

achieve the goal of people oriented and the greatest effectiveness of the banks.

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Queuing theory is an analytical method that models a system allowing queue, calculates it's

performances and determine its' properties in other to help managers in decision making. System

performance may include mean waiting time, percentile of the waiting time, utilization of the

server, throughput (i.e number of customers served per unit time), average number of customers

waiting etc. Queues can be refers to as items, customers, a signal in a line awaiting some kind of

service. Queuing time is the amount of time a vehicle, customer or a thing spends before being

attended to for some kind of service. Queues may be finite or infinite. (Acheampong, 2013)

Basically, a queuing model is characterized by; arrival process of customers, the behavior of

customers, the service time, discipline capacity, waiting room or a lane.

A queuing system consists of a server, a number of customers who demand service and a queue

of customers waiting to be served.

According to Banks et al. (2011), Queuing models provide the analyst with a powerful tool for

designing and evaluating the performance of queuing systems. A queuing system is basically

made up of arrival or inputs to the system, queuing discipline and the service facility. Whenever

customers arrive at a service facility, some of them have to wait before they receive the desire. It

means that the customer has to wait for his/her turn, may be in a line. This situation can be

frustrating when customers has to wait very long before they are served in a queue and bring

dissatisfaction to them. These waiting times waste the time of customers that could have used

been used in productive activities. Long waiting can reduce revenue collected at pay points.

(Barak 2012)

A common feature of Nigerian banks is overcrowded banking halls. This often leads to poor

level of customer satisfaction and movement of customers from one bank to the other, seeking

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for better banking services without much delay. The modern day automation of bank services

(such as Online Real Time, Automated Teller Machine (ATM), POS etc.), with the intention of

minimizing queue problem has not yielded the desired results due to frequent network

breakdowns and inadequate high level professionals to manage the server. Hence, long queue

had persisted in all Nigerian banks. Since the time available to any economic agent has

alternative uses, for leisure or for work, incessant queues often lead to economic wastage.

Typical of Nigeria, customers wait for hours on queue to get service without the service

providers feeling that there is an opportunity cost for the wasted time. Many customers have thus

wondered why banks cannot employ additional staffs or increase their branch network by

opening more branches in order to provide better and efficient service and boost the level of

customer satisfaction (Ogunsakin, et al, 2013).

1.1 The Aim of the Study

The aim of this project is to use queuing model in evaluating the efficiency of Customer Care

Service in First Bank Talata Mafara.

The objectives are:

i. To determine Service Utilization

ii. To determine the Probability that there is no queuing

iii. To determine Average waiting time of customers in the system

iv. Average time spent in the system

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1.2 Significance of the Study

The findings of this study is intended to assist managers of UBA Bank point managers to reduce

the waiting time of customers at the pay point center.

This will improve customer service satisfaction and encourage them to carryout bank transaction

in time. The findings of this study will help the managers to gather enough information about

waiting lines at the cashier point centers and be able to determine the number of transaction

counters appropriate to reduce waiting times.

Determining the optimal number of transaction counters from the findings of this study, will

minimize waiting times which will affect the development of the economy positively since

customers can use their wasted times in other productive activities.

1.3 The scope of the study

The scope of this study covers the transaction carried out by the customer at UBA bank Wushishi

for the period of one week

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 CHAPTER TWO

2.0 Literature Review

This chapter emphasizes on the review of relevant literatures on applications of queuing theory.

The history behind queuing theory is discussed.

Nafees (2007), analyzed queuing systems for an empirical data of supermarket checkout service

unit as an example. The model designed for this example is a multiple queues multiple-server

model. The study required an empirical data which included arrival time in the queue of

checkout operating unit (server), departure time and service time.

Sharma et al. (2013), queuing theory is the mathematical study of waiting lines and it is very

useful to define modern information technologies requiring innovations that are based on

modeling, analyzing to deals as well as the procedure of traffic control of daily life of human like

telecommunications, reservation counter, super market, big bazaar, picture cinema, hall ticket

window and also to determine the sequence of computer operations, computer performance,

health services, airport traffic, airline ticket sales.

Duder and Rosenwein (2001), used queuing based 'rule-of-thumb' formulas to estimate the cost

of abandonment and to determine the optimum number of operators.

Whitt (2005) also used queuing analysis for staffing a call center, considering the proportion of

servers present as a random variable.

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Cugnasca (2007), provided useful information to build availability models for computer systems

used in airspace control centers based on analytical models provided by queuing theories. The

researchers used queuing models to establish availability parameters related to a data center

operation and its management issues.

May (2012), analyzed data from a large open pit gold mine and applied to a multichannel

queuing model representative of the loading process of the haul cycle. She stated that, one

method of feet selection involves the application of queuing theory to the haul cycle and most

mining haul routes consist of four main components; loading, loading hauling, dumping and

unloaded hauling to return to the loader. The outputs of the model were compared against the

actual truck data to evaluate the validity of the queuing model developed.

WOENSEL and VANDAELE (2007), presented an overview of different analytic queuing

models for traffic on road networks. They shown that queuing models can be used to adequately

model uninterrupted traffic flows. An analytical application tool to facilitate the optimal

positioning of the counting points on a highway was also presented in the paper.

Brown (2012), aimed at increasing understanding of system variables on the accuracy of simple

queuing models. A queuing model was proposed that combines G/G/1 modeling techniques for

rework with effective processing time techniques for machine availability and the accuracy of

this model was tested under varying levels of rework, external arrival variability and machine

variability. The research shown that the model performed best under exponential arrival patterns

and can perform well even under high rework conditions. Generalization was made with regards

to the use of this tool for allocation of jobs to specific workers and/or machines based on known

rework rates with the ultimate aim of queue time minimization.

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Lakshmi and Lyer (2013), reviewed the contributions and applications of queuing theory in the

field of health care management problems. They proposed a system of classification of health

care areas which are examined with the assistance of queuing models. Their goal was to provide

sufficient information to analysis who are interested in using queuing theory to model a health

care process and who want to locate the details of relevant models.

Alfares (2009), presented the modeling and solution of a real-life operators cheduling problem at

a call center. Queuing and integer programming models were combined to minimize the total

weekly labor cost while providing an acceptable service level for each hour of each day of the

week. The models determined optimum staffing levels and employee weekly work schedules for

meeting a varying workload for each hour of the week. Queuing analysis was applied to data on

the number and duration of calls in order to estimate minimum hourly labor demand.

Ogunsakin et al 2013 did a comparative analysis of Service Delivery by ATM in Two Banks

with the application of Queuing Theory. From the empirical analysis, the study found that the

average arrival rate, average service rate, average time spent in the queue for Access bank as

2.01, 1.65, 0.5 respectively and UBA as 3.28, 1.75, 1.67minutes, respectively. The study

concluded that the average number of idle time obtained for the two banks were 3minutes

and7minutes respectively.

In examining the Queuing Process and its Application to Customer Service Delivery in Fidelity

Bank Plc, Maiduguri by Bakari, (2014), the study obtained the value of the traffic intensity,

otherwise known as the utilization factor to be less the one (i.e. ρ<1). The study concluded that

the system operates under steady-state condition. Thus, the value of the traffic intensity, which is

the probability that the system is busy, implies that 95% of the time period considered during

9
data collection the system was busy as against 4% idle time. This indicates high utilization of the

system.

In offering the Queuing model as a Technique of Queue solution in Nigeria Banking Industry,

Anichebe (2013) found that, using a three-server system was better than a 2-server or 4-

serversystems in terms of the performance criteria. The study recommended that the

management should adopt a three-server model to reduce total expected costs and increase

customer satisfaction.

Ogbadu and Usman (2012)studied the Imperatives of Customer Relationship Management in

Nigerian Banking Industry. Findings from the study revealed that there is a direct relationship

between customer relationship management and customer loyalty as well as banks profitability.

Forbes (2008) analyzed the impact of airline delays on customer complaints, showing that

customer expectations play an important role mediating this effect. Campbell and Frei (2010)

studied multiple branches of bank, provided empirical evidence that teller waiting times affect

customer satisfaction and retention. Their study revealed significant heterogeneity in customer

sensitivity to waiting time, some of which could be explained through demographics and the

intensity of competition faced by the branch.

Aksin-Karaesmen (2011) model led callers‟ abandonment decision as an optimal stopping

problem in a call center context, and found heterogeneity in caller‟s waiting behavior. The study

also looked at customer heterogeneity in waiting sensitivity and related this sensitivity to

customers‟ price sensitivity. They found that association between price and waiting sensitivity

has important managerial implications.

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Odirichukwu et al (2014) examined the banking queue system in Nigeria. The study uncovered

the applicability and extent of usage of queuing models in achieving customer satisfaction at the

lowest cost. The study recommended that, if First-in-First-out Queue Method is implemented,

the design achieves an orderly service delivery. Also customers who have successful gotten the

queue number should be attended to first based on FIFO-Queue Model already programmed.

Odunukwe (2013) examined the application of queuing models to customer’s management in the

banking system using United Bank for Africa, Okpara Avenue Branch Enugu, as a case study.

The results obtained from the study showed that the arrival pattern follows a poisson distribution

and that the service pattern follows an exponential distribution. The study recommended that the

Bank management should increase the number of servers to three so as to help reduce the time

customers spend on queue and also reduce cost incurred from waiting.

Despite these studies, there is still a gap in the literature as regards studies that empirically

investigate queue theory parameters in the area of study selected. Therefore, as a contribution to

the existing literature on queue theory and service delivery, the present study makes use of a

mathematical model to harness the complexities of queuing situations in the banking halls in

Nigeria.

2.1 STATEMENT OF PROBLEM

i. Inadequate Network accessibility.

ii. Lack of skilled staffs.

iii. Lack of technical banking systems.

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 CHAPTER THREE

3.0 Research Methodology

This chapter gives a brief description of method of data collection and queuing systems and it's

characteristics. The appopriate tools of multiple queueing model are clearly discussed.

3.1 Method of Data Collection

Basically, the data used for this study were obtained from primary sources. The method of data

collection is through direct observation. A wrist watch, a pen and a notepad were requirements

needed for the recording of relevant information such as; number of customers the arrival

timesof customers, waiting time, and service time. The observation was made during the working

hours (9 – 12noon). The recorded information was used to calculate average waiting time,

average service time and the utilization factor.

3.2 Method of Analysis

The method of analysis for this study is the multi-server queuing modeling system which

follows(M/M/S): (∞/FCFS) specification. In the case, the performance measure analysis

including, the arrival time, waiting time service time, priority level, for average customers and

the number of servers available were computed using the appropriate tools.

3.3 Multi-Server Queuing Models: ((M/M/S): (∞/FCFS))

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In this case instead of a single server, there are multiple but identical servers in parallel toprovide

service to customers. It is assumed that queues are formed and customers are served on afirst

come first serve, basis by any of the servers (Bunday, 1996). The service times are distributed

exponentially with an average of μ customers per unit of time. If there are ncustomers in the

queuing system at any point in time, then the following cases may arise:

i. If n < s, (number), then there will be no queue of customers in the system is less than the

number of servers. However, (s - n) number of servers will not be busy. The combined

service rate will then be μn = nμ.

ii. If n ≥ s, (number of customers in the system is more than or equal to the number of

servers), then all servers will be busy and the maximum number of customers in the

queue will be (n - s). The combined service rate will be μu = sμ.

The transaction (Deposite and withdrawing) in a bank by customers follows this a multi-server

queuing modeling because a specific sequence of steps are usually followed: initial contact at the

customers service,desk, filling out forms, etc. Because several servers are usually available for

this procedure, more than one customer at a time may be processed.

3.4 Traffic Intensity and Measures of Effectiveness

The following are the formulae for measuring traffic intensity and effectiveness in the banking

industry using queuing modeling (Bunday, 1996):

Property of Multiple queuing theory

Utilization Factor

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 λ
ρ=
cμ

The probability that there is no customer in the system

c !(1−ρ)
p0 =
¿¿

The probability of not queuing on arrival

ρ0 =¿ ¿

Average number of customers in the system

n=ρ ¿ ¿

Average time spent in the system

t=ρ ¿ ¿

Where λ is the mean

μ is the mean (average)

C is the number of server

P0 is the probability of no queuing

n is the sample size

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 CHAPTER FOUR

4.0 Data Presentation

Day Time Arrival Service

1 9-12noon 46 45
2 9-12noon 48 46
3 9-12noon 50 44
4 9-12noon 49 47
5 9-12noon 50 47
6 9-12noon 50 49
7 9-12noon 50 48
Total 343 326

Source: UBA Bank Wushishi (24 Aug. – 2nd September 2018)

4.1 Data Analysis

Where C =2

n=7

Average number of customers that arrive

343
=49
7

Average number of customer that was served

326
=47
7

Since the period of observation is 3hrs daily

49
:- λ= =16.3 per hours
3

15
 47
: - μ= =16 per hours
3

Utilization Factor

16.3 16.3
ρ= = =0.509
(2)(16) 32

c !(1−ρ)
p0 =
¿¿

2 !(1−0.509)
p0 =
¿¿

0.982
p0 =
1.036+ 0.982 [ 0.509+1.018 ]

0.982
p0 =
1.036+1.4995

0.982
p0 =
2.5355

0.387

Average number of the customer in the system

n=ρ ¿ ¿

n=0.509 ¿ ¿

(0.509)(1.0396324)(0.387)
n= +1.018
0.482162

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 0.509(1.0396324) 0.387
n= +1.018
0.482162

0.20479
+1.018
0.482162

0.42473+1.018

1.443

Average time spent in the system

t=¿ ¿

t=¿ ¿

(1.036324)0.387
t= +0.0625
0.4822(32)

0.4011
+0.0625
15.4304

0.02599+0.0625

0.08849

Summary of Finding

It was observed from the finding that the arrival when the service point is 2 is 16.3 customer and

the service is 16 customers. It was also observed that the probability that the system is busy is

50.9%, the probability that there is no customer in the system is

0.387, average number of customers in the system is 1 customer while the average time spent in

the system is 0.08849 hours.

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 CHAPTER FIVE

5.0 SUMMARY OF FINDINGS, RECOMMENDATION AND CONCLUSION

5.1 Summary
18
This project work is based on the queuing theory model in evaluating the efficiency of service in

UBA bank. The type of data used in this project work is primary data, it was obtained through

direct observation on the arrival and service rate of customer at the UBA bank Wushishi branch

from 9.00am to 12.00noon for the period of 7 days. A multiple queuing model was applied in

evaluating the pattern of the data. The result obtained shows that the arrival rate is 16.3

customers and the service rate is 16 customers. The probability that the system is busy is 50.9%,

the probability that there is no customer in the system is 0.387, and average of number of

customers in the system is 1 customer while the average time spent in the system is 0.08849

hours.

5.2 Conclusion

In conclusion, based on the above finding, it can be seen that the queuing system operated in

UBA bank Wushishi branch is not efficient enough. This could be as a result of the fact that the

servers are not that fast in service provided by the cashiers.

5.3 Recommendation

Based on the finding it can be recommended that the UBA bank Wushishi Branch should adjust

or provide more servers so as to improve the service render to the customers.

Also there should be more banks, skilled bankers, and technical banking system, with this it will

improve the banks disabilities so as to satisfy the customers need at the appropriate time.

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