Operations Management

WAITING LINE MANAGEMENT

Tapas Mahapatra
 Waiting Time
Everyday we encounter waiting lines in one or
the other form. Line for railway ticket, waiting for
a bus, waiting for canteen to open, waiting for
turn in ATM, hold on telephone etc.
Service mangers need to properly manage these
customer waiting time to ensure both efficiency
and that customers are not negatively affected by
waiting to the point to taking their future
business to elsewhere.
There are two components of waiting time:
1. actual waiting time
2. Perceived waiting time by customer
 Waiting Lines
• Waiting lines occur in all sorts of systems
• Wait time is non-value added
– Wait time range from the acceptable to the emergent
• Short waits in a drive-thru
• Sitting in an airport waiting for a delayed flight
• Waiting for emergency service personnel
– Waiting time costs
• Lower productivity
• Reduced competitiveness
• Wasted resources
• Diminished quality of life
 Waiting time and Good Service
Customer satisfaction is key to success and
providing customer satisfaction through
managing customer’s perceived waiting time is
an important parameter in taking competitive
advantage.
Factors to good service:
1. Friendliness
2. Knowledge of service provider
3. Fast service
Waiting time pays a major role in fast service.
Time is more valuable in more highly developed
countries, customers are less willing to wait.
Even willing to pay more for premium service.
 Waiting time and good Service
Providing fast service does not mean providing
service in specified time (e.g. boards displaying
service time in bank for various service) but to
satisfy the customer with a level of service to
create a customer loyalty.
 Queuing Theory
• Queuing theory
– Mathematical approach to the analysis of waiting
lines
– Applicable to many environments
• Call centers
• Banks
• Post offices
• Restaurants
• Theme parks
• Telecommunications systems
• Traffic management
The Difference Between Manufacturing and Service

Manufacturing:
Finished
Goods

Transformation
Customer
Process

Efficiency F. G. Inventory
versus versus
F. G. Inventory Level of Service

8-4
The Difference Between Manufacturing and Service

Services:

Transformation
Customer
Process

Efficiency
versus
Customer Service

8-5
 Why Is There Waiting?
• Waiting lines tend to form even when a
system is not fully loaded
– Variability
• Arrival and service rates are variable
– Services cannot be completed ahead of time
and stored for later use
 Waiting Lines: Managerial Implications

• Why waiting lines cause concern:

– The cost to provide waiting space
– A possible loss of business when customers leave the line
before being served or refuse to wait at all
– A possible loss of goodwill
– A possible reduction in customer satisfaction
– Resulting congestion may disrupt other business operations
and/or customers
Efficiency and Customer Waiting time

Cost of
waiting
cost

Cost of
service

Waiting Time

Classical operations Management model

 Efficiency and Customer Waiting time –
Trade off in waiting line management
Waiting of customer is taken as inventory in
manufacturing. If process efficiency is increased
by making the customer to wait, it is like
increasing in process inventory cost.
If waiting time is reduced, the cost of service is
increased as more workers are engaged to
provide the service and they would be idle if
customer is not available.
Proper design of the service delivery process,
workers an often be productive during idle time.
 Level of Service versus Process
Efficiency
Fast Service (Expensive)

Cost

Slow Service (Cheap)

Good (Fast) Poor (Slow)

Level of Service

8-6
 Waiting Line Management
• The goal of waiting line management is to minimize total
costs:
– Costs associated with customers waiting for service
– Capacity cost
 Customer Satisfaction
Customer satisfaction is related to the
comparison between customer’s expectation of
a service performance and his perception of
that performance.
If perceived performance meets the expectation,
customer would be satisfied, if performance
falls it results in customer dissatisfaction and if
exceeds expectation , it results in delighted
customer.
In marketing terminology, satisfaction is said to
be related to disconfirmation (i.e. difference)
between expected and perceived performance.
 The Role of Satisfaction in a Customer Behavior Model

Expectations Performance Disconfirmation

SATISFACTION

Attitudes Intentions Future Behavior

8-8
 The Role of
Satisfaction
in a
Customer
Behavior
Model

SATISFACTION

Exhibit 16.3
 Customer Expectations
It is defined as customers’ preconceived notion
of what level of service he or she should
receive from a particular business or
organisation ( varies from organisation to
organisation like expectation from dhaba and
five star hotel)
Source of expectations :
1. Advisement
2. Prior experience
3. Word of mouth
4. Overall service delivery package (high price
service –less or no waiting)
 Perceived Waiting Time
Perceived waiting time is the amount of time a
customer believes he or she has waited before
receiving the service.
It is not the actual time ???
Waiting time for tea is different from waiting for
exams result …
 Factors Affecting Customer
Satisfaction with Waiting
• Firm-Related • Customer-Related
–Unfair versus fair waits –Solo versus group waits
–Uncomfortable versus –Waits for more valuable
comfortable waits versus less valuable
–Unexplained versus services
explained waits –Customer value
–Initial versus systems
subsequent waits –Customer’s current
attitude
 Factors Affecting Customer’s
satisfaction with Waiting
Categories:
1. Firm related Factors
2. Customer related Factors
3. Both firm and customer related factors
 Firm Related Factors

1. Unfair versus Fair waits – depends on queue

design, service system design and contact hours.
If first come first serve basis is followed, customer
feels fairness like if many service points are
available, same queue can be made and which
ever station is free takes next customer like in
Railways booking office.
Giving importance to telephone call than
physically present customer also creates
unfairness.
 Firm Related Factors
2. Uncomfortable versus comfortable waits- if a
person is uncomfortable, time passes more
slowly. Comfort by lights, music, air-conditioners,
seating etc. can be used.
Restaurants provide lounges for waiting.
3. Unexplained Versus explained waits – if waiting
time is explained to customer for example train
late arrival times informed to customer, customer
feels more satisfied.
Unused capacity in terms of idle workers or idle
workstations is a form of unexplained waits.
Waiting for unknown duration is also causes
feeling of long waiting.
 Firm Related Factors
4. Initial versus subsequent waits
Customer feels more dissatisfied with initial waits
prior to entering a service delivery system rather
than subsequent waits as see them outside of
system.
Initial waiting must be minimized.
 Customer Related Factors
These can not be controlled by the firm.
1. Solo versus group waiting
2. Waits for more valuable versus less valuable
services
3. Customer value system - customers who place a
premium on obtaining fast service do not mind
paying for it and do not want to waste time in
waiting.
4. Customer’s current attitude – customers attitude
just prior to entry impact on their satisfaction. If he
is upset, he will be dissatisfied.
 Both Firm an customer Related Factors
1. Occupied versus unoccupied waits – reading
materials, interesting displays, mirrors, and
music, gambling casinos in night clubs to
entertain during waiting, create win-win
situation. Also customers can be made busy in
useful activities like Availability of internet, Fax,
PC etc for customers to do their jobs.
2. Anxious versus calm waits – Customer’s anxiety
regarding the nature of the service or the
uncertainty of the wait may effect customer
satisfaction. Like waiting in emergency room,
waiting for lab. Report etc. It may be reduced by
explaining the procedures or reading materials.
 A Focus On Providing Fast service
This can be brought by :
1. System design concept – by adopting split core
strategy by having first core – front –of-the
house – interact directly with customer and
adopt chase strategy and Second core –
backroom – accomplish all the activities which
can be done without customer’s presence
adopting level-type strategy.
By reducing set up time, worker can switch
from one job to other and use idle time.
2. Cross Training of Employees to perform
variety of jobs.
 Waiting line Characteristics

Waiting line phenomenon has Six components :

1. Population
2. Arrival characteristics
3. Physical features of the line
4. Customer Selection
5. Service facility structure
6. Exit
 Waiting line Characteristics

Service System

Physical
Arrival Selection Service Exit
Population Features
I Facility VI
II III IV
 Waiting line Characteristics
1. Population source – finite population or infinite
population (finite population – when customer leaves
population reduces)
2. Arrival characteristics – arrival pattern (controllable like
controlling by prices or uncontrollable like emergency
medical demand), size of arrival units (one at a time or in
batch like shares) , distribution pattern (time between
arrival is constant or follow statistical distribution-
Exponential or Poisson, Erlang others) and degree of
patients (patient and impatient)
Balking Behaviour – customer comes, surveys the facility
and waiting line and decide to leave
Reneging Behaviour – Customer comes, surveys, joins
the line for some time and leaves
 Jockeying – customer switches from one queue to
other queue thinking that that queue is fast moving

Poison distribution :is a discrete probability

distribution of number of customers arriving in
some time interval
In many practical situations, the inter arrival time
is approximated by an exponential distribution
F(t) F(t)
λ= arrival rate λ= arrival rate

t t
Exponential Probability Exponential cumulative
density function Probability density function
 Erlang distribution

F(t)

K=3

K=2

K= phases of services , without

completion of all phases service
is not completed
 Waiting line Characteristics

3. Physical features of line

a) length – infinite potential length like line of
vehicles backed up for miles at a bridge or limited
line capacity like in gas station, loading docks and
parking lots.
b) No. of lines – single line or single file or multiple
lines
 Waiting line Characteristics
4. Customer Selection
Queuing discipline – A queuing discipline is priority
rules to determine the order of service to customer
in waiting line these are
First cum first serve or first in first out
Shortest processing time reservations first
Emergencies first
Limited needs like single transactions only in a
bank or cash only in a market
 Others – highest profile customers first, largest
orders first, best customers first etc.
 Waiting line Characteristics
5. Service Facility Structure
a) Single channel, single line
b) Single channel multiphase
c) Multi channels, single phase
d) Multi channel, multiphase
Service rate :
a) constant rate – machine controlled operations
b) Erlang distribution – single channel, multi –
service situation , practical applications are rare
c) exponential distribution – used to approximate
actual situations
 Waiting line Characteristics

6. Exit – two scenario

a. Customer may return to the source population
– like machine with fast breakdown problem or
reoccurring common cold.
b. Low probability of Re-Service – machine with
less probability of breakdown or health problem
 Waiting Line Equations
There are seven different waiting line systems
and respective steady state equations
Model 1
Single channel layout, single service phase,
infinite source population, Poisson arrival
pattern, First come first serve (FCFS) queue
discipline, Exponential service pattern, Unlimited
permissible queue length.
Example : Drive –in teller at bank, One lane toll
bridge
 ∞
Population Source
• Infinite source
– Customer arrivals are unrestricted
– The number of potential customers greatly
exceeds system capacity
• Finite source
– The number of potential customers is limited
 Channels and Phases
• Channel
– A server in a service system
– It is assumed that each channel can handle
one customer at a time
• Phases
– The number of steps in a queuing system
Common Queuing Systems
 Arrival and Service Patterns
• Arrival pattern
– Most commonly used models assume the arrival rate can be
described by the Poisson distribution
• Arrivals per unit of time
– Equivalently, interarrival times are assumed to follow the
negative exponential distribution
• The time between arrivals
• Service pattern
– Service times are frequently assumed to follow a negative
exponential distribution
Poisson and Negative
Exponential
 Waiting Line Equations
Equation for Model 1
Where
nl= λ2 / µ(µ -λ )
µ= service rate
ns= λ / (µ -λ ) λ= arrival rate

tl= λ / µ(µ -λ ) ρ = potential utilisation of service

facilities
ts= λ / µ(µ -λ ) 1/µ= Average service time
1/λ= Average time between arrival
Pn = ( 1-λ/µ)(λ/µ)n
nl= Average number waiting in line
ρ = λ/µ ns= Average number in system
(including any being served)
Pn = probability of
occurrence tl= Average time waiting in line
ts= Average total time in system
(including time to be served)
 Waiting Line Equations
Model 2
Single channel layout, single service phase,
infinite source population, Poisson arrival
pattern, First come first serve (FCFS) queue
discipline, Constant service pattern, Unlimited
permissible queue length.
Example : Automatic car wash, roller coaster
rides in amusement park
 Waiting Line Equations
Equation for Model 2
Where
nl= λ / 2µ(µ -λ )
2
µ= service rate
ns= nl+ λ/µ λ= arrival rate

tl= λ / 2µ(µ -λ ) ρ = potential utilisation of service

facilities
ts= t1 + 1/µ 1/µ= Average service time
1/λ= Average time between arrival
nl= Average number waiting in line
ns= Average number in system
(including any being served)
tl= Average time waiting in line
ts= Average total time in system
(including time to be served)
 Waiting Line Equations
Model 3
Single channel layout, single service phase,
infinite source population, Poisson arrival
pattern, First come first serve (FCFS) queue
discipline, Exponential service pattern, limited
permissible queue length.
Example : Ice cream stand, cashier in a
restaurant
 Waiting Line Equations

Model 4
Single channel layout, single service phase,
infinite source population, Poisson arrival
pattern, First come first serve (FCFS) queue
discipline, Discrete distribution service
pattern, unlimited permissible queue length.
Example : Empirically derived distribution of
flight time for a transcontinental flight
 Waiting Line Equations

Model 5
Single channel layout, single service phase,
infinite source population, Poisson arrival
pattern, First come first serve (FCFS) queue
discipline, Erlang service pattern, unlimited
permissible queue length.
Example : one person barber shop
 Waiting Line Equations

Model 6
Multi channel layout, single service phase,
infinite source population, Poisson arrival
pattern, First come first serve (FCFS) queue
discipline, Exponential service pattern,
unlimited permissible queue length.
Example : Parts counter in auto agency, two
lane toll bridge
 Waiting Line Equations

Model 7
Single channel layout, single service phase,
finite source population, Poisson arrival
pattern, First come first serve (FCFS) queue
discipline, Exponential service pattern,
unlimited permissible queue length.
Example : Machine breakdown and repair in
factory
 Two Typical waiting line situations (single server
queuing model M/M/1- Markovian or exponential)

Problem 1 : Consumer in line

A bank wants to know how many customers
(or cars) are waiting for a drive in teller, how
long they have to wait, the utilization of the
teller
Problem 2 :Equipment selection
A franchisee for Robot car Wash must decide
which equipment to purchase out of a choice
of three. Larger unit cost more, but wash cars
faster. To make the decision, costs are related
to revenue.
Problem 1 : Consumer in line
A nationalized bank is considering opening a drive –in
window for customer service. Management
estimates that the customers will arrive in their cars
at a rate of 15 per hours. The teller who will staff the
window can service customers at the rate of one
every three minutes. Assuming Poisson arrival and
exponential service, find
i) Utilisation of the teller
ii) Average number in the waiting line
iii)Average number in the system
iv)Average waiting time in line
v) Average waiting time in the system, including
service.
Problem 1 : Consumer in line
i) The average Utilisation of the teller is
Given average service rate is 3 minutes i.e. average
service time = 1/ µ = 3 minutes = 1/20 hour
therefore, µ, service rate = 20 customers / hour
and arrival rate = 15 / hour
utilisation rate = ρ = λ /µ = 15 / 20 = 75 percent
ii) Average number in the waiting line
nl= λ2 / µ(µ -λ ) = 15 2 / 20(20-15) = 2.25 customer
iii) Average number in the system
ns= nl+ λ/µ = 2.25 + 15/20 = 3 customers
Problem 1 : Consumer in line
iv) Average waiting time in line
tl= λ / µ(µ -λ ) = 15/ 20(20-15) = 0.15 hrs. or 9 minutes

v) Average waiting time in the system, including

service
ts= tl + 1/µ = 0.15 + 1/20 = 0.2 hrs. or 12 minutes
Problem 2 : Equipment Selection
The robot company franchises combination of gas and
car wash station throughout the united states,. Robot
gives a free car wash for a gasoline fill-up, or, for a wash
alone, charges $0.50. Past experience shows that the
number of customers that have car washes following fill-
ups is about the same as for a wash alone. The average
profit on a gasoline fill-up is about $0.70 and the costs of
car wash to Robot is $0.10. Robot works for 14 hours per
day.
Robot has three power units and drive assemblies, and a
franchisee must select the unit preferred. Unit 1 can
wash cars at the rate of one every five minutes and is
leased for $12 per day. Unit 2, a larger unit, can wash
cars at the rate of one every four minutes but costs $ 16
per day. Unit 3, the largest, costs $22 per day and can
wash a car in 3 minutes.
Problem 2 : Equipment Selection
The franchisee estimates that customers will not wait in
line more than five minutes for a car wash. A longer time
will cause Robot to lose both gasoline sale and car wash
sales. If the estimate of customer arrivals resulting in
washes in 10 per hour, which was unit should be
selected?
Unit 1 : service rate µ = 12 per hour ( 1 per 5 minutes)
arrival rate λ = 10 per hour
Average waiting time of customer (constant service pattern
Model 2)
tl= λ / 2µ(µ -λ ) = 10/ 2 x12(12-10) = 0.208 hours =
12 ½ minutes
Problem 2 : Equipment Selection
Unit 2 : service rate µ = 15 per hour ( 1 per 4 minutes)
arrival rate λ = 10 per hour
Average waiting time of customer (constant service pattern
Model 2)
tl= λ / 2µ(µ -λ ) = 10/ 2 x15(15-10) = 0.067 hours =
4 minutes
If waiting time is only criteria, unit 2 is to be selected as
customer will not wait for more than five minutes while
in unit 1 customer has to wait for 12 ½ minutes.
But we must look at the profit difference between two.
Problem 2 : Equipment Selection
With unit 1, some customers would leave because of longer
wait. We can calculate the lost sales with unit one by
inserting i=5minutes or 1/12hours (the average length of time
customer will wait) and solve for λ (arrival rate) as this will be
effective arrival rate.
tl= λ / 2µ(µ -λ ) or λ = 2 t l µ2 / (1 +2 t l µ )
λ = 2 (1/12) (12) 2 / ( 1 + 2(/120(12)) = 8 per hours
as original estimated arrivals are 10 customers per hours,
there is a loss of 2 customers per hours
loss of profit = 2 customers per hour x 14 hours x average of
fill up profit and car wash profit
= 2 x 14 x ½ ($0.70 + $0.50- $0.10) = $15.40 per day
Additional cost for unit 2 = $ 2 per day , Hence unit 2 is
preferable. Unit 3 is not considered as five minute wait is