OPIM 220 Session 09

1
Operations and Information Management (OPIM) 220

Senthil Veeraraghavan
The Wharton School
University of Pennsylvania
Spring 2012
Session 09
Queuing (wrap-up)
Senthil Veeraraghavan, Session #09
1
OPIM 220 Spring 2012
Extensions of the M/M/1 system
Case 1: Only one server, and the same arrival and service rates as before but
there is a limit on the number of waiting customers. [buffer=K] M/M/1/K system.
Case 2: First, let us consider the same queue under same arrival rate but more
servers and no limit on customers accepted. There are c servers identical
servers now. [M/M/c system].
servers c
K is maximum buffer size

2
2
Birth-Death Process for M/M/1/K system
0 1 K K-1 2

Steady State transition equations:
Solving which gives us:
1 ...
1 1 ) (
2 1 0
1
1 1
0 1
= + + + +
=
s s + = +
=
+
K
K K
i i i
P P P P
P P
K i for P P P
P P

=
= =
+1 0
0
1
1
,.., 1 , 0
K
i
i
P
K i all for P P
3
Performance Measures of M/M/1/K system
Note that arrival rate can be equal to service rate. [Why?]
In this case,
Note some customers are blocked. Therefore, the effective arrival rate is
eff
= [1-P
K
].
eff eff q q
q
K
K
K
n
K
n
K
n
n
L W L W
P L L
K
L
n
nP L

/ /
) 1 (
1
) 1 (
1
1
1
0
1
1
1
0
0
= =
=

+
=
=
+
+
+
=
=
K n for K P
n
,..., 1 , 0 ) 1 /( 1 = + =
3
4
Birth Death Process for M/M/c system
0 1 c+1 c 2

2 3
c c c
Writing steady state transition equations & solving which gives us:
1
1
1
0
0
0
0
) 1 (
!
) (
!
) (
!
1
!
1
)
`
+ =
>
|
|
.
|
\
|
=
s
|
|
.
|
\
|
=
=
c
c
n
c
P
c n all for P
c c
P
c n all for P
n
P
c
c c
n
n
n
c n n
n
n
5
Performance Measures for M/M/c
Using the probabilities in last slides, and Littles law and deriving as before,
] , [
/ 1
/
) 1 ( !
] Pr[ *
0 2
1
0
c
Again
W W
L W
P
c
c
L
c L
i system in customers of No i L
q
q q
c c
q
q
i
=
+ =
=

=
+ =
= =
+
=
4
6
Generalization of Queues: M/G/1 Queues
Arrivals occur according to a Poisson process.
Let the Service time (or rate) can be distributed according to any distribution G.
Note: memory less property does not hold any more!
Pollaczek-Khintchine Formula:
Let mean service time be E[T]=1/ and let variance of service times=o
2
Let =/.
Expected number of customers in the queue:
Similar expression can be written for G/G/1 queues.
Note that the congestion increases as the variance of the service time
increases.
) 1 ( 2
2 2 2
+
=
q
L
TSA and Waiting Times
T.S.A. used to track security line wait times and post that data on its Web
site.
the agency stopped publishing that information in 2008.
Average Wait times:
2006: 12 minutes
2008: 15 minutes
2010: 99% less than 20 minutes.
Checked Baggage Fee effects:
Longer lines at security.
7
5
Congestion Pricing
Example: Congestion charges in London, Hot priced roads vs. Free
roads on I-15.
All consumer impose negative externalities on every one else.
If allowed to join a queue on their own, more people join than it is socially
optimal. Hence congestion taxes improve consumer welfare.
Congestion Pricing can be set dynamically can improve transit times,
reduce pollution, and minimize accidents.
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Source: Naor (Econometrica, 1969), New York Times, Federal
Highway Administration, City of London Corporation.
Psychology of Waiting vs. Service Duration
In many scenarios, customers prefer to be served well, but dislike waiting
for the same service (Schelling 1975).
9
6
High Prices and Long waits for Primary Care
10
Does good care take longer?
Service times improve quality, but also wait times.
Prices may increase in competition.
Sources: Chen et al (2009), Anand, Pac and Veeraraghavan (2011).
11
Crazes of Christmases past
7
12
Is congestion a signal of quality?
Why do people choose crowded restaurants
even if there is considerable waiting time?
Product Introduction: Long Waiting times for
Toyota Prius (hybrid cars), Nintendo Wii.
If the service value is uncertain, do consumers
consider popularity as a proxy for quality?
Firms can build capacity gradually if
service/products continue to be remain
desirable. (e.g. Toyota Prius produced in J apan
for global market until recently).
Source: J oining Longer Queues: Information Externalities in Queue
Choice, Veeraraghavanand Debo, MSOM, 2009.
Upcoming Case/Assignment Details (Updated)
Note the following scheduled dates and details.
Kristen Cookie Case (textbook).
Tuesday, February 21
st
Case preparation questions at the end of the case.
Toyota Motor Company
Thursday, February 23
rd
Case preparation questions will be posted on Canvas.
Midterm: March 1
st
, Thursday. In-Class Exam (80 minutes).
Closed Book/ Closed Notes
TWO Letter-size cheat-sheets (i.e. 4 pages).
Since there are 2 sections, we will start and end on time.
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Operations and Information Management (OPIM) 220

K is maximum buffer size

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