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# Service Operations

Management
Session 9
March 1st, 2018
Last Class

• Quality management

• Acceptance sampling

## 1-Mar-18 ISOM Operations Management 2

Today’s Class

• Service operations

• Dice game

## 1-Mar-18 ISOM Operations Management 3

Example: grocery visit

• Pick up groceries
• Walk to check-out counter area
• Long line ahead of you

## • Why are you waiting?

o Perhaps there too few clerks
o Or there was a unexpected rush of customers in the store at that time

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Where the time goes?

## In a life time, the average an American will spend

SIX MONTHS: Waiting at stoplights
EIGHT MONTHS: Opening junk mail
ONE YEAR: Looking for misplaced objects
TWO YEARS: Unsuccessfully returning phone calls
FOUR YEARS: Doing housework
FIVE YEARS: Waiting in line
SIX YEARS: Eating

## 1-Mar-18 ISOM Operations Management 5

Waiting at the Disney Theme Parks

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Implications of Long Waiting Time

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Waiting Lines and Queuing System

• Where?
o Call centers
o Theme parks
o Fast food restaurant
o Supermarket
o…
• Questions:
o What are the root causes of waiting?
o How to reduce the waiting time?

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What is special about service operations?

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Class Outline

• Dice game

• A queueing model
• What are the root causes of waiting?
• How to reduce the waiting time?

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Dice Game I
• A bank, tellers, and customers.
• Customer arrivals in a period determined by rolling a die, 1, 2,..., 6.
• Capacity (max # customers processed in a period) also determined by
rolling a die, 1, 2, ..., 6.
• If demand exceeds capacity, customers wait.
• Simulate the system, and record the number of customers waiting in
line.

## If we simulate 100 periods, how many periods (roughly) will

we see zero customers waiting at the end of the period?
How many customers will be waiting in the line on average?
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Game II

## • A bank, tellers, and customers.

• Customer arrivals in a period determined by rolling a die, 1, 2,..., 6.
• Capacity (max # customers processed in a period) is fixed at 3.5.
• If demand exceeds capacity, customers wait.
• Simulate the system, and record the number of customers waiting in
line.

Game III

## • A bank, tellers, and customers.

• Customer arrivals in a period is fixed at 3.5.
• Capacity (max # customers processed in a period) is fixed at 3.5.
• If demand exceeds capacity, customers wait.
• Simulate the system, and record the number of customers waiting in
line.
How many customers will be waiting in the line on average?

## 1-Mar-18 ISOM Operations Management 13

Discussions of Dice Game

## • Why do queues exist?

o Variability of arrival process
o Variability of service time

## • How to reduce waiting time?

o Reducing variability of arrival time
o Examples:
o Reducing variability of service time
o Examples:

Queuing Model

Servers
Customers Queue

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Why Study Queuing Models?
• To assess system performance
- Waiting time
- # of customers in the system
• To design a "better" system
- reduce waiting time

## • To improve customer service

• Good service can
- increase profit
- improve market share
- improve reputation
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Elements of Queuing Models
System Configuration
Customer Arrival Service Time (# of servers, # of lines,
Queueing Discipline)

Queueing Models

## • Average # • Average time spent in the

customers in the system (and queue)
system (and queue) System Performance

## 1-Mar-18 ISOM Operations Management 17

Elements of Queuing Models
Service provided here
Customers leave the
Customers Arrive system
Servers
queue

## • Inter-arrival time: time between two consecutive arrivals (random)

Time
a1 a2 a3 a4 a5 a6 a7 …

## • Service time: time taken to serve one customer (random)

Time
s1 s2 s3 s4 s5 s6 s7
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M/M/s Model
Service rate at each server
µ customers/min
Arrival rate
l customers/min Customers Experience /
System Performance
FCFS Servers
Queue

## • Input of the queue

q Exponential inter-arrival time: arrival rate = l
q Exponential service time: service rate at each server = µ
q Number of servers = s
This is called M/M/s queue
q Assumption: one queue; FCFS; l < sµ
• Output of the queue (System performance measures)
q Average number of customers in the queue Lq (or in the system Ls)
q Average time spent in the queue Wq (or in the system Ws)
q Utilization of the server ρ
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Remember: l & µ are Rates
• l = Mean number of arrivals per If average service time is 15
time period minutes, then µ is 4
o e.g., 3 units/hour customers/hour

## • µ = Mean number of people or

items served per time period
o e.g., 4 units/hour
• 1/ µ = 15 minutes/unit

## 1-Mar-18 ISOM Operations Management 20

Server Utilization
average arrival rate
Server utilization = average potential service rate

Example:
There are 2 servers. The average arrival rate is 10 customers per hour. The
average service time per customer is 10 minutes:

Server utilization =

## Server utilization is the average fraction of time a server is busy.

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Example: Call Center for Software Support
• 3 representatives answer phones (each can handle all types of calls)
• 20 calls per hour
• 4 minutes per call, on average

## 1-Mar-18 ISOM Operations Management 22

Inputs: Definitions of terms:
lambda 20 lambda = arrival rate
mu 15 mu = service rate
s = number of servers
Lq = average number in the queue
Ls = average number in the system
Wq = average time spent in the queue (avg. wait in queue)
Ws = average time spent in the system (avg wait in system)
P(0) = probability of zero customers in the system
P(delay) = probability that an arriving customer has to wait

Outputs:
s Lq Ls Wq Ws P(0) P(delay) Utilization
0
1 infinity infinity infinity infinity 0.0000 1.0000 1.0000
2 1.0667 2.4000 0.0533 0.1200 0.2000 0.5333 0.6667
3 0.1446 1.4780 0.0072 0.0739 0.2542 0.1808 0.4444
4 0.0259 1.3592 0.0013 0.0680 0.2621 0.0518 0.3333
5 0.0046 1.3379 0.0002 0.0669 0.2634 0.0126 0.2667
6 0.0008 1.3341 0.0000 0.0667 0.2636 0.0026 0.2222
7 0.0001 1.3334 0.0000 0.0667 0.2636 0.0005 0.1905
8 0.0000 1.3333 0.0000 0.0667 0.2636 0.0001 0.1667
9 0.0000 1.3333 0.0000 0.0667 0.2636 0.0000 0.1481
10 0.0000 1.3333 0.0000 0.0667 0.2636 0.0000 0.1333
11 0.0000 1.3333 0.0000 0.0667 0.2636 0.0000 0.1212
12 0.0000 1.3333 0.0000 0.0667 0.2636 0.0000 0.1111
13 0.0000 1.3333 0.0000 0.0667 0.2636 0.0000 0.1026

## 1-Mar-18 ISOM Operations Management 23

Summary
• Insights from dice game
o Queues exist because of variability in arrival times and service times
o Reducing variability reduces waiting time

• M/M/s model
o Using Excel, we can get the following performance measures

## Model parameters Performance measures

l
µ r ,Wq ,Ws , Lq , Ls ...
s