UNIT – 3

Queueing Theory
and Replacement
Problems
• Queuing Theory – single and
Multi-channel models –
infinite number of
customers and infinite
calling source.
• Replacement Models –
Individual replacement
Models (with and without
time value of money) –
Group Replacement Models
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Queueing Theory by standard
Formulation
• A flow of customers from finite/infinite
population towards the service facility
forms a queue.
• The arriving unit that requires some
service to be performed is called customer
• The person who serves the customers in
the queue is called server.

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System
• In general the queue can be described by
4 basic characteristics
– The input (Arrival pattern)
– The service mechanism (Service Pattern)
– Queue discipline
– Customers behavior.

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Input (Arrival Pattern)
• The input describes the way in which the
customers arrive and join the system. Generally
the customers arrive in more or less random
fashion, which is not worth making the
prediction.
• Therefore, the arrival pattern can best be
described in terms of probabilities and hence the
probability distribution for inter arrival time ( the
time between two successive arrivals) must be
defined.
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 Therefore, we consider the queueing system
in which the customers arrive in a Poisson
fashion with mean arrival rate .

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Service Mechanism (Service
Pattern)
• The service pattern is specified when it is
known hw many customers can be served
at a time, and when the service is
available.
• Distribution of service time may be
constant or a random variable which
follows negative exponential distribution
with mean service rate 

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Queue Discipline
• The queue discipline is a rule determining
the formation of queue, the manner of the
customers behaviour while waiting and the
manner in which they are chosen for
service.
• It can be classified as
– FIFO or FCFS
– LIFO or LCFS
– SIRO

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Customers Behaviour
• The customers behaviour can be in any of the
four ways
– Balking: A customer may leave the queue, if there is
no waiting space.
– Reneging: This occurs when the customer leaves the
queue due to impatience
– Priorities: In certain applications some customers
are served before others regardless of their order of
arrival.
– Jockeying: Customers may jump from one waiting
line to another.

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Transient State
• A system is said to be in Transient state
when its operating characteristics are
dependent on time

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Steady State
• A system is said to be in steady state,
when the behavior of the system is
independent of time.
• If Pn(t) is the probability that there are ‘n’
customers in the system at time ‘t’, then in
steady state

Lt Pn(t )  0
n 

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Traffic Intensity OR Utilization
Factor.
• An important measure of simple queue is
its traffic intensity given by




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Kendal’s Notation
• Any queueing model may be completely
specified in the following symbolic form
• (a / b / c) : (d / e)
– a: Probability law for the arrival time
– b: Probability law according to which
customers are served.
– c: Number of channels (service stations)
– d: Capacity of the system
– e: Queue Discipline

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Model I
• Single server infinite capacity.
– (M/M/ 1) : (  / FCFS)

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Formulas
• Steady state P0  1   and Pn   (1   )
n

• Average (expected) number of customers

(units) in the system

LS 
1 

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• Average length of the queue
  2
Lq  LS  
 1 

• Expected waiting time in the system

LS 1
WS  
  
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• Waiting time in the queue
Lq 
Wq  
  (   )
• Expected waiting time of a customer who
has to wait (W / W > 0) =

1
 

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• Expected length of the non-empty Queue
(L / L >0) = 
 
• Probability of Queue size is greater than
or equal to n is  N

• Probability (Waiting time in the system  t )



 (   )e
(   ) t
dt
t
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• Probability (Waiting time in the queue  t )



(   ) t
 (    )e dt
t

• Traffic intensity 



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Model II
• Multi server with infinite capacity
– (M / M / S) : (  / FCFS )

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Formulas
• Steady state
1
 ( s )
s 1
s   
n S s

P0      , 1
 n0 n! s!  1    s
n
1   
Pn     P0 if n  0,1,2,..., s  1
 n!   
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 
• Length of the queue Lq  PS ,
(1   ) 2
2

  P0
 
where PS 
s!

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• Length of the system 
L S   Lq

• Waiting time in the queue Lq
Wq 


LS
• Waiting time in the system WS 

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• The mean number of waiting individuals,
who actually wait is given by (L / L >0 ) =

1 
• The mean waiting time in the queue for
those who actually wait is given by

1
( w / w  0) 
s  
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 PS
• Probability ( w  0) 
1 

• Probability that there will be some one

waiting
PS 
1 
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• Average number of idle servers =
s  (average no. of customers served )

• Efficiency of M/ M/ S model
Average no of customers served
Total Number of customers served

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Model III
• Single server with finite capacity
– (M / M / 1) : ( N / FCFS )

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 Formulas
1 
P0 
1  N 1

1 
Pn   n

1  N 1

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 N
LS  P0  n n


Lq  L S 


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 LS
WS 

Lq
Wq 

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Model IV
• Multi server with finite capacity
– (M / M / S) : ( N / FCFS )

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 1
 s 1 1    n
n
1 
n

P0       n c   
 n 0 n!    n c c c!    

1    n

   P0 , 0ns
n   
Pn   n
 1 
 s n c s!    P0 , s  n  N
  
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 (s ) s 
Lq 
s!(1   ) 2

1   N  s 1
 (1   )( N  s  1)  
N s
* P0

( s  n)( s )
s 1 n
Ls  Lq  s  P0 
n 0 n!
Ls
Ws  ,     (1   N )

1
Wq  Ws 


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Problems
1. In a railway Marshalling yard, goods train arrives
at a rate of 30 trains per day. Assuming that
inter arrival time follows an exponential
distribution and the service time distributions is
also exponential, with an average of 30 minutes.
Calculate the following (i) the mean Queue Size
(line Length)? (ii) The probability that Queue
size exceeds 10 and (iii) if the input of the train
increases to an average 33 per day what will be
the changes in (i) and (ii)?
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2. Customers arrive at a one window drive-in bank
according to Poisson distribution with mean 10
per hour. Service time per customer is
exponential with mean 5 minutes. The space in
front of the window including that for the
serviced car can accommodate a maximum of 3
cars. Other can wait outside this space. (i)
What is the probability that an arriving customer
can drive directly to the space in front of the
window? (ii) What is the probability that an
arriving customer will have to wait outside the
indicated space? (iii) How long the arriving
customer is expected to wait, before starting
service?

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3. In a super market, the average arrival rate
of customer is 10 in every 30 minutes
following Poisson process. The average
time takes taken by the cashier to list
and calculate the customers purchases
is 2.5 minutes, following exponential
distribution. What is the probability that
the Queue length exceeds 6? What is
the expected time spent by a customer in
the system?

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4. On an average 96 patients per 24-hour day
require the service of an emergency clinic.
Also an average, a patient requires 10 minutes
of active attention. Assume that the facility can
candle only one emergency at a time.
Suppose that it costs the clinic Rs 100/- per
patient treated to obtain an average servicing
time of 10 minutes and that each minute of
decrease in this average to be budgeted but
the clinic to decrease the average size of the
Queue from 1 1/3 patient to ½ patient?

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5. Arrivals at a telephone booth are considered to be
Poisson with an average time of 10 minutes
between one arrival and the next, the length of a
phone call is assumed to be distributed
exponentially with mean 3 minutes. (i) What is
the probability that a person arriving at the booth
will have to wait? (ii) What is the average length
of the queue that forms from time to time? (iii)
The telephone department will install a second
booth when convinced that an arrival would
expect to have to wait at least three minutes for
the phone. By how much the flow of arrivals be
increased in order to justify the second
booth?(iv) what is the probability that it will take
more than 10 minutes altogether to wait for the
phone and complete the call?

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6. At a one-man barbershop, customers arrive
according to Poisson distribution with a mean
arrival rate of 5 per hour and the hair cutting
time was exponentially distributed with an
average hair cut taking 10 minutes. It is
assumed that because of his excellent
reputation, customers were always, willing to
wait. Calculate i) Average number of customers
in the shop and the average number of
customers waiting for hair cut. ii) The percent of
time arrival can walk in right without having to
wait. iii) The percent of customers who have to
wait before getting into other barber’s chair

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7. A super market has two girls ringing up
sales at the counters. If the service time
for each customer is exponential with
mean 4 minutes, and if the people arrive in
a Poisson fashion at the rate 10 per hour.
a) What is the probability of having to wait
for the service? b) What is the expected
percentage of idle time for each girl? c) If a
customer has to wait, what is the expected
length of his waiting time?

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8. A petrol station has two pumps. The
service time follows the exponential
distribution with mean 4 minutes and
cars arrive for service in a Poisson
process at the rate of 10 cars per hour.
Find the probability that a customer has
to wait for service. What proportion of
time the pumps remain idle?

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9. Four counters are being run on the
frontier of a country to check the passports
and necessary papers of the tourist. The
tourist chooses a counter at random. If
the arrival at the frontier is Poisson at the
rate of  and the service time is
exponential with parameter /2, what is
the steady state average queue at each
counter?

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10. In a railway marshalling yard, goods
train arrives at the rate of 30 trains per
day. Assume that the inter arrival time
follows an exponential distribution and
the service time is also to be assumed as
exponential with mean of 36 minutes,
calculate a) the probability that the yard
is empty b) the average queue length
assuming that the line capacity of the
yard is 9 trains.

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11. A barber shop has space to
accommodate only 10 customers. He can
serve only one person at a time. If a
customer comes to his shop and finds it
full he goes to the next shop. Customers
randomly arrive at an average  = 10 per
hour and the barber service time is
negative exponential with an average 1 /
= 5 minutes per customer. Find .P0 , Pn

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12 At a railway station, only one train is handled at
a time. The railway yard is sufficient only for two
trains to wait while the other is given signal to
leave the station. Trains arrive at the station at
an average rate of 6 per hour and railway station
can handle them on an average 12 per hour.
Assuming Poisson arrivals and exponential
service distribution, find the steady state
probabilities of various numbers of trains in the
system. Also find the average waiting time of a
new train coming to the yard.

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13 Customers arrive at a one window drive in bank
according to a Poisson distribution with mean 10
per hour. Service time per customer is
exponential with mean 5 minutes. The care
space in front of the window including that for
the service can accommodate a maximum of 3
cars. Other cars can wait outside this space. A)
What is the probability that an arriving customer
can drive directly to the space in front of this
window? B) What is the probability that an
arriving customer will have to wait outside this
indicated space? C) How long is an arriving
customer expected to wait before starting the
service?
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14. A stenographer has 5 persons for whom
she performs stenographic work. Arrival
rate is Poisson and service times are
exponential. Average arrival rate is 4 per
hour with an average service time of 10
minutes. Find a) the average waiting time
of an arrival and b) the average length of
waiting time. C) the average time on
arrival spent in the system.

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Replacement Problems
• Replacement problems are concerned
with the situations that arise when some
items such as men, machine, bulbs etc
need replacement due to their decreased
efficiency, failure or breakdown

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• Replacement problem arises due to the
following factors
– The old item has become worse or requires
expensive maintenance
– The old item has failed due to accident
– A more efficient design of equipment has
become available in market

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• And the problem of replacement model is
to decide the best policy at which age the
product should be replaced. The two types
of replacement policies are
– Individual replacement policy: Under this
policy, an item is replaced immediately after its
failure
– Group Replacement policy: Under this policy,
we have to take decisions as to when all the
items should be replaced, irrespective of the
fact that the item is working or not
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• Replacement policy for items whose
maintenance cost increase with time, and
money value is not considered
R - maintenance cost
C - Capital cost of the item
S - Scrap value of the item

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Problems
1. A machine owner find from his past
records that the cost per year of
maintaining a machine whose purchase
price is Rs 6000 are as given below:
Year 1 2 3 4 5 6
Maintenance Cost 1000 1200 1400 1800 2300 2800
Resale Value 3000 1500 750 375 200 200

Determine at what age is replacement due?

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• Solution: From the questions we see that
the cost Price is given as C = Rs 6000/-
and the scrape value is the resale value
given for each year

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 Average
Maint. Cumulative C – S (Resale Total cost (3) =
Year cost
Cost (1) value) (2) (1) + (2)
= (3) / Year

1 1000 1000 3000 4000 4000

2 1200 2200 4500 6700 3350
3 1400 3600 5250 8850 2950
4 1800 5400 5625 11025 2756
5 2300 7700 5800 13500 2700*
6 2800 10500 5800 16300 2717

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• Finally in the average cost we see the
minimum value 2700 occurs on 5th year.
Therefore the machine has to be replaced
at the end of 5th year

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2. Machine A costs Rs 9000/-. Annual
operating cost are Rs 200 for the first year,
and then increased by Rs 2000/- every
ear. Determine the best age at which to
replace the machine. If the optimum
replacement policy is followed, what will by
the average yearly cost of owning and
operating the machine?

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• 3. The cost of machine is Rs 6100 and its
scrap value is Rs. 100. The maintenance
cost found from experience are as follows

Year 1 2 3 4 5 6 7 8
Maintenance
Cost 100 250 400 600 900 1200 1600 2000

When should the machine be replaced?

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 Maint Cumulative C- S Total (3) = (1) + Average = (3) /
Year
Cost (1) (2) (2) Year

1 100 100 6000 6100 6100

2 250 350 6000 6350 3175
3 400 750 6000 6750 2250
4 600 1350 6000 7350 1837
5 900 2250 6000 8250 1650
6 1200 3450 6000 9450 1575*
7 1600 5050 6000 11050 1579
8 2000 7050 6000 13050 1631
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4. A take owner estimates from his past
records that the costs per year for
operating a taxi whose purchase price
when new is Rs 60,000/- are as given
below

Age 1 2 3 4 5
Operating cost 10,000 12,000 15,000 18,000 20,000
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After 5 years, the operating cost is Rs
6000k, where k = 6, 7, 8, 9, 10 (k –
denoting age in years). If the resale value
decreases by 10% of purchase price every
year, what is the best replacement policy?

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• C= 60,000
• 10 % of purchase price = This shows that
the resale value decreases by 6000 for
every year.

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 Annual Cumulative Resale C- S Total(3) = Average cost =
Year
cost cost (1) value (2) (1 ) + (2) (3) / years
1 10000 10000 54000 6000 16000 16000*

2 12000 22000 48000 12000 34000 17000

3 15000 37000 42000 18000 55000 18333

4 18000 55000 36000 24000 79000 19750

5 20000 75000 30000 30000 105000 21000

6 36000 111000 24000 36000 147000 24500

7 42000 153000 18000 42000 195000 27857

8 48000 201000 12000 48000 249000 31125

9 54000 255000 6000 54000 309000 34333

10 60000 315000 0 60000 375000 37500

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Definitions
• Money value: Money has a value over
the time period. It is nothing but spending
Rs 100 today is same as spending Rs 110
in a year’s time. That is money has grown
10 % in a year. This change in the money
is called the money value. Or one rupee
after a year from now is equivalent to (1.1)-
1 rupee today.

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• Present worth factor (PWF): IN money
value we have seen that One rupee today at
the rate of interest 10 % is same as (1.1)-1
after a year and (1.1)-2 after 2 years.
Similarly we say that one rupee spent ‘n’
years from now is equivalent to (1.1)-n today.
This quantity (1.1)-n is called the present
worth factor or present value of one rupee
spent ‘n’ years from now
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• Discount rate (Depreciation value): The
present worth factor of unit amount to be
spent after one year is given by V = (1+r )-
1 where r is the rate of interest. Then V is

called the discount rate or depreciation

value.

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Problems
5. Assume that the present value of one
rupee to be spend in a year’s time is Rs
0.9 and C = Rs3000, capital cost of
equipment and the running costs are given
in the table below. When should the
machine be replaced?

Year 1 2 3 4 5 6 7
Cost 500 600 800 1000 1300 1600 1800
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 Year R(n) Vn-1 Vn-1 R. Vn-1 R.Vn-1 C+ RVn-1 Average

1 500 1 1 500 500 3500 3500

2 600 0.9 1.9 540 1040 4040 2126.316

3 800 0.81 2.71 648 1688 4688 1729.889

4 1000 0.729 3.44 729 2417 5417 1574.709

5 1300 0.656 4.1 852.8 3270 6270 1529.268*

6 1600 0.59 4.69 944 4214 7214 1538.166

7 2000 0.531 5.221 1062 5276 8276 1585.137

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6. 6. A manufacturer is offered with 2
machines A and B. A is priced 5000/- and
running cost is estimated at Rs 800 for
each of first five years and increasing by
Rs 200/- per year in the sixth year and
subsequent years. Machine B which has
same capacity as A cost Rs 2500/- but will
have running cost of Rs 1200/- per year
for six years, and increasing by Rs 200/-
per year thereafter.

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• If the money is worth 10% per year which
machine should be purchased? Assume
that the machines will eventually sold for
scrap at negligible price.

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 C+ RVn-
Year R(n) Vn-1 Vn-1 R. Vn-1 R.Vn-1 1 Average
1 800 1 1 500 500 3500 3500

2 800 0.9091 1.9091

3 800 0.8264
4 800 0.7513
5 800 0.6830
6 1000 0.6209
7 1200 0.5645
8 1400 0.5132
9 1600 0.4665
10 1800 0.4241
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Group Replacement Problems
1. The following failure rates have been
observed for certain items.
– End of month: 1 2 3 4 5
– Prob. Of failures:0.10 0.30 0.55 0.85 1.00
The cost of replacing an individual item is
Rs.1.25. The decision is made to replace all
items simultaneously at fixed intervals and
also replace individual items as they fail.

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• If the cost of group replacement is 50
paise, what is the best interval for group
replacement . At what group replacement
per item, would a policy of strictly
individual replacement become preferable
to the adopted policy

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solution:
• Assume that items failing during a month
are replaced at the end of the month.
• Suppose there are 1000 items in use, and
let the probability be p(i)
• p1=0.10
• P2 = 0.30-0.10 = 0.20
• P3=0.25
• P4=0.20
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P5=0.15 73
• Let N denote the number of replacements
at the end of the month
• N0=1000
• N1=N0*p1=1000*0.10 = 100
• N2=N0*p2+N1*p1 =1000*0.20+100*0.10
= 200+10=210
• N3=N0*p3+N1*p2+N2*p1
= 250+20+21=291
• N4=N0*p4+N1*p3+N2*p2+N3*p1
= 396
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• N5=N0*p5+N1*p4+N2*p3+N3*p2+N4*p1
=331

Now the expected life of each item

  ipi
 1*.10  2 *0.20  3*.25  4 *.30  5*.15
 3.2
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• Average number of failures per month
1000
 313(app)
33

• The average cost for different group

replacement policies is

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End of Individual Total Cost (Rs) Average
Month Replacement cost

1 100 1000*.50+100* 625

1.25=625

2 310 1000*.50+310* 443.8

1.25=887.7

3 601 1000*.50+601* 417.1*

1.25=1251.3

4 997 1000*.50+997* 436.6

1.25=1746
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• Since the average cost is lowest in the 3rd
month, it is optimal to have a group
replacement after every 3rd month.

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2. There is a large number of light bulbs, all
of which must be kept in working order. If
the bulb fails in services, its cost Rs.1 to
replace it, but if all the bulbs are replaced
in the same operation, it costs only 35
paise a bulb. If the proportion of bulbs
failing in successive time intervals is
known, decide on the best replacement
policy and give reason.
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• The following mortality rates for light bulbs
have been observed.
– Proportion failing during first week = 0.09
– Second week = 0.16
– Third week = 0.24
– Fourth week = 0.36
– Fifth week = 0.12
– Sixth week = 0.03

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