Waiting Line Models and Service Improvement

operations management

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Waiting is a part of life need it always be?

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operations management

Waiting is a part of life… need it always be?

Waiting Lines / Queues

» Waiting in lines does not add enjoyment » Waiting in lines does not generate revenue » There are costs in providing waiting space » Lines can result in loss of business
(customers leave, refusing to wait) » Loss of goodwill » Overall reduction in customer satisfaction » Congestion may disrupt other business operations
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operations management

What can help reduce waiting times?

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Approaches that help… operations management
Reduce perceived waiting time
– Magazines in waiting rooms – Radio/television – In-flight movies – Filling out forms – mirrors

When all else fails, derive benefits from waiting
– Place impulse buy items near checkout (“endcaps”) – Advertise other goods/services

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What’s important to the Customer? operations management

» Length of the line when I arrive » How long I have to wait

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What’s important to the Service Provider? operations management

» How many people I have to hire to service
customers (clerks, cashiers, baggers, etc.)

» (Hopefully) the level of service provided

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Waiting Lines
You have just been hired as the new assistant manager of a new Costco store. You are in charge of customer service. You determine that: » 60 shoppers arrive per hour on average » You can process 50 shoppers per hour on average with the number of cashiers Will your service be any good? Will your customers be satisfied?
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operations management

Waiting Lines operations management

» 60 shoppers arrive per hour on average » You can process 60 shoppers per hour on
average Will your service be any good? Will your customers be satisfied?
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Waiting Lines operations management

» 60 shoppers arrive per hour on average » You can process 70 shoppers per hour on
average Will your service be any good? Will your customers be satisfied?
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Waiting Lines: United States operations management
What’s an acceptable time to wait in line at: Starbucks Outback Steakhouse Grocery store Post Office DMV Planning Department
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Waiting Lines

» What is a “reasonable” waiting time? » Is your willingness to wait dependent
upon the type of establishment?

» Are there cultural differences? » Can we establish a model of wait time to
reduce average wait time?
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operations management

“Queueing” in Japan
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Who is this woman, and why is she smiling???

Waiting in line to get add slips signed in HTM302
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Elements of Waiting Line Analysis  Queue
A single waiting line

 Waiting line system consists of
Arrivals Servers Waiting line structures

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Components of Queuing System operations management

Source of customers— calling population Arrivals

Waiting Line or “Queue”

Server

Served customers

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Elements of a Waiting Line

 Calling population
 Source of customers

 Arrival rate (λ)
 Frequency of customer arrivals at waiting line system  Typically follows Poisson distribution

 Service rate ( µ)
 Frequency of customer services  Often follows negative exponential distribution
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operations management

Elements of a Waiting Line

 Arrival rate (λ) must be less than service rate (µ) or system never clears out

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operations management

Elements of a Waiting Line

 Queue discipline
Order in which customers are served First come, first served is most common

 Length can be infinite or finite
Infinite is most common assumption Finite is limited by some physical structure
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operations management

Basic Waiting Line Structures

 Channels are the number of parallel servers  Phases denote number of sequential servers the customer must go through

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Single-Channel Structures

Single-channel, single-phase

Waiting line

Server

Starbucks Coffee (single cashier/barrista)
Single-channel, multiple phases

Waiting line

Servers

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CSUSM Convenience Store (1 cashier)

Multi-Channel Structures

Multiple-channel, single phase

Waiting line Servers

Fry’s Electronics (72 cashiers)

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CSUSM Convenience Store (3 cashiers)

Predicting Waiting Times operations management
Later we’ll show how you can mathematically predict the performance of a waiting line, in terms of: » Number of people waiting in line » Expected waiting time But first, let’s look first at some model results to get an intuitive feel as to what happens.

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Number of Customers Waiting In Line A Single-Server Model with 60 customer arrivals per hour
e ic rv se ine ch r, l l y oa ou ial pr /h nt ap f 60 one we s o xp As e s e tim ow gr

10 Customers In Line 8 6 4 2 0
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70
73 77 81 85 89 93 97 10 1 10 5 10 9 11 3 11 7 12 1

Customer Served Per Hour
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120

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Customer Wait Time (in hours) A Single-Server Model with 60 customer arrivals per hour
e ic rv t se a i ch r, w l y o a u ia l pr /ho nt ap f 60 one we s o xp As e s e tim ow gr

0.18 0.16 Wait Time (hours) 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00
65 69

70
73 77 81 85 89 93 97 10 1 10 5 10 9 11 3 11 7 12 1

Customers Served per Hour
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120

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0.20

Probability Customer Waits A Single-Server Model with 60 customer arrivals per hour

90.0% 80.0% 70.0% Probability 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%
10 5 10 1 10 9 11 3 11 7 12 1 65 69 73 77 81 85 89 93 97

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120

Custom ers served per Hour
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100.0%

Multi-Channel Structures

Starbucks (3 cashiers, 3 barristas)
Multiple-channel, multiple-phase

Waiting line Servers

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Which is better? operations management

Waiting line Servers

Waiting line

Servers

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Which is better? operations management

Waiting line Servers

Waiting line

Servers

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Two servers, four possibilities; which is best? operations management

Waiting line

Servers

Waiting line Servers

Servers Waiting line Waiting line Servers

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Multi-Channel Structures (that the book doesn’t deal with…)
Large Stores(Wal Mart, grocery stores, etc.)

Multiple-channel, single-phase

Waiting lines

Servers

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operations management

Multi-Channel Structures (that the book doesn’t deal with…)
Amusement Parks (Legos, Disneyland, etc.) Sporting Parks (Qualcomm, Sports Arena, etc.) Concerts (Coors Amphitheater, etc.)
Multiple-channel, multiple-phase

$ $ $
Waiting lines Parking Fee

$ $ $
Entrance Ticket Fee Collection

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operations management

Multi-Channel Structures

Heh, why isn’t this line moving??!?

$ $ $
Waiting lines Parking Fee

$ $ $
Entrance Ticket Fee Collection

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operations management

Operating Characteristics operations management
» The mathematics of alternative multi-channel
and multi-phase waiting lines can become very complex

» Mathematics of queuing theory does not
provide optimal or best solutions

» However we can describe system performance
by calculating operating characteristics

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Cost Relationship in Waiting Line Analysis

The customers are paying these “costs”

Waiting Cost Level of service
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operations management

Expected costs

Cost Relationship in Waiting Line Analysis

Expected costs

The businesses are paying these “costs”

Service cost

Level of service
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Cost Relationship in Waiting Line Analysis

Total cost Expected costs Service cost

Waiting Costs Level of service
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operations management

Waiting Line Costs and Quality Service  Traditional view is that the level of service should coincide with minimum point on total cost curve  TQM approach is that absolute quality service will be the most costeffective in the long run
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operations management

Cost Relationship in Waiting Line Analysis
Traditional suggested service level
Expected costs

Total cost Service cost

Waiting Costs Level of service
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operations management

Cost Relationship in Waiting Line Analysis

Total cost Expected costs Service cost

Poorer service, higher cost to customer

Better service, higher cost to business

Waiting Costs Level of service
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operations management

Basic Single-Server Model

 Assumptions:

Poisson arrival rate Exponential service times First-come, first-served queue discipline Infinite queue length Infinite calling population

 λ = mean arrival rate  µ = mean service rate
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operations management

Formulas for Single-Server Model

Probability that no customers are in the system (either in the queue or being served) Probability of exactly n customers in the system

P0 = 1 - λ µ Pn = = L = Lq = λ µ λ µ λ µ - λ λ2 µ(µ n

• P0
n

1- λ µ

Average number of customers in the system Average number of customers in the waiting line
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operations management

λ = mean arrival rate µ = mean service rate

Formulas for Single-Server Model

Average time a customer spends in the queuing system Average time a customer spends waiting in line to be served Probability that the server is busy and the customer has to wait Probability that the server is idle and a customer can be served
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W =

1 µ λ

=

L λ

Wq =

λ µ(µ - λ) λ µ

ρ =

I = 1-ρ = 1λ = P0 µ

operations management

λ = mean arrival rate µ = mean service rate

An example operations management
You manage a small grocery store, with one checker for scanning, collecting payment, and bagging groceries. The arrival rate is 24/hr, service rate 30/hr, so average waiting time is 8 minutes. You want to improve checkout time, so you are considering adding: » A second employee to bag groceries OR » A second checker Which is better?

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An example operations management

Waiting line

cashier

bagger

Waiting line 2 cashiers

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Waiting Line Cost Results
 Adding an employee results in savings and improved customer service  Adding a 2nd counter results in slightly greater savings (~$20/week) and improved customer service (~1 min less waiting), but only after the initial investment has been recovered (~ 5 months)  A new counter results in more idle time for employees  A new counter would take up potentially valuable floor space
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operations management

operations management

Simulation Model

Informal feedback operations management

Write a “2 minute” journal to be handed in immediately The journal should briefly summarize: » Major points learned » Areas not understood or requiring clarification

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