ARBA MINCH UNIVERSITY COLLEGE OF BUSINESS AND ECONOMICS DEPARTMENT OF

MANAGEMENT MBA PROGRAM

COURSE - Operational Management

COURSE Title - Waiting Line Models
Group One Members
N Student’s Name ID No.
o
.
1 Afwork Asrat Atsa PWBE/024/15
2 Andualem Eshetu Mohammed PWBE/027/15
3 Yehualashet Tekleariam Bezu PWBE/035/15

Submitted to Abiot Tsegaye (BA, MBA, PhD)

October, 2023
Ethiopia, sawula campus
 Table Contents

1) Introduction
2) MANAGERIAL IMPLICATIONS OF WAITING LINES
3) GOAL OF WAITING-LINE MANAGEMENT
4) CHARACTERISTICS OF WAITING LINES
5) MEASURES OF WAITING-LINE PERFORMANCE
6) QUEUING MODELS: INFINITE-SOURCE
7) QUEUING MODEL: FINITE-SOURCE
8) CONSTRAINT MANAGEMENT
9) THE PSYCHOLOGY OF WAITING
10) OPERATIONS STRATEGY
 1.Introduction
 The study of waiting lines, called queuing theory, is one of the oldest and most widely used
quantitative analysis techniques.
 Waiting lines are an everyday occurrence, affecting people shopping for groceries, buying
gasoline, making a bank deposit, or waiting on the telephone for the first available airline
reservationist to answer.
 Queues, * another term for waiting lines, may also take the form of machines waiting to be
repaired, trucks in line to be unloaded, or airplanes lined up on a runway waiting for permission
to take off.
 The three basic components of a queuing process are arrivals, service facilities, and the actual
waiting line. so, we discuss how analytical models of waiting lines can help managers evaluate
the cost and effectiveness of service systems.
 waiting line costs and then describe the characteristics of waiting lines and the underlying
mathematical assumptions used to develop queuing models.
 1.1 Waiting line costs
 Most waiting line problems are centered on the question of finding the ideal level of services that
a firm should provide.
 Supermarkets must decide how many cash register checkout positions should be opened.
 Gasoline stations must decide how many pumps should be opened and how many attendants
should be on duty.
 Manufacturing plants must determine the optimal number of mechanics to have on duty each
shift to repair machines that break down.
 Banks must decide how many teller windows to keep open to serve customers during various
hours of the day. In most cases, this level of service is an option over which management has
control.
 The other extreme is to have the minimum possible number of checkout lines, gas pumps, or
teller windows open. This keeps the service cost down but may result in customer dissatisfaction.
 Most managers recognize the trade-off that must take place between the cost of providing good
service and the cost of customer waiting time.
 Total expected cost is the sum of expected service costs plus expected waiting costs.
 1.2 Characteristics of a queuing system

There are three parts of a queuing system:

(1) the arrivals or inputs to the system (sometimes referred to as the calling
population),
(2) the queue or the waiting line itself, and
(3) the service facility.
 These three components have certain characteristics that must be examined before
mathematical queuing models can be developed
 1.2.1 Arrival Characteristics
 The input source that generates arrivals or customers for the service system has three major characteristics
 It is important to consider the size of the calling population, the pattern of arrivals at the queuing system,
and the behaviour of the arrivals.
 SIZE OF THE CALLING POPULATION;- Population sizes is considered to be either unlimited (essentially infinite) or
limited (finite). When the number of customers or arrivals on hand at any given moment is just a small portion of
potential arrivals, the calling population is considered unlimited. Most queuing models assume such an infinite
calling population.
 PATTERN OF ARRIVALS AT THE SYSTEM Customers either arrive at a service facility according to some known
schedule (for example, one patient every 15 minutes or one student for advising every half hour) or else they arrive
randomly. Arrivals are considered random when they are independent of one another and their occurrence cannot
be predicted exactly.
 Frequently in queuing problems, the number of arrivals per unit of time can be estimated by a probability distribution
known as the Poisson distribution.
 BEHAVIOR OF THE ARRIVALS Most queuing models assume that an arriving customer is a patient customer. Patient
customers are people or machines that wait in the queue until they are served and do not switch between lines.
Patient customers are people or machines that wait in the queue until they are served and do not switch between
lines.
 Balking refers to customers who refuse to join the waiting line because it is too long to suit their needs or interests.
Reneging customers are those who enter the queue but then become impatient and leave without completing their
transaction.
 1.2.2 Waiting Line Characteristics

 The waiting line itself is the second component of a queuing system. The length of a
line can be either limited or unlimited.
 A queue is limited when it cannot, by law of physical restrictions, increase to an infinite
length. This may be the case in a small restaurant that has only 10 tables and can serve
no more than 50 diners an evening.
 Analytic queuing models are treated in this chapter under an assumption of unlimited
queue length.
 A queue is unlimited when its size is unrestricted, as in the case of the tollbooth
serving arriving automobiles.
 A second waiting line characteristic deals with queue discipline. This refers to the rule
by which customers in the line are to receive service. Most systems use a queue
discipline known as the first-in, first-out (FIFO) rule.
 1.2.3 Service Facility Characteristics

 The third part of any queuing system is the service facility. It is important to examine two basic properties: -

(1) the configuration of the service system and

(2) the pattern of service times.

 BASIC QUEUING SYSTEM CONFIGURATIONS Service systems are usually classified in terms of their number of
channels, or number of servers, and number of phases, or number of service stops, that must be made.

• A single-channel system, with one server, is typified by the drive-in bank that has only one open teller, or by the
type of drive-through fast-food restaurant that has become so popular in the United States. If, on the other hand,
the bank had several tellers on duty and each customer waited in one common line for the first available teller,
we would have a multichannel system at work.

 A single-phase system is one in which the customer receives service from only one station and then exits the
system.

• A fast-food restaurant in which the person who takes your order also brings you the food and takes your money
is a single-phase system. So is a driver’s license agency in which the person taking your application also grades
your test and collects the license fee. But if the restaurant requires you to place your order at one station, pay at
a second, and pick up the food at a third service stop, it becomes a multiphase system.
 Con…
 SERVICE TIME DISTRIBUTION Service patterns are like arrival patterns in that they can be
either constant or random. If service time is constant, it takes the same amount of time to
take care of each customer. This is the case in a machine-performed service operation such
as an automatic car wash. More often, service times are randomly distributed. In many
cases it can be assumed that random service times are described by the negative
exponential probability distribution.
 The exponential distribution is important to the process of building mathematical queuing
models because many of the models’ theoretical underpinnings are based on the
assumption of Poisson arrivals and exponential services. Before they are applied, however,
the quantitative analyst can and should observe, collect, and plot service time data to
determine if they fit the exponential distribution
 1.2.4 Identifying Models Using Kendall Notation
 D. G. Kendall developed a notation that has been widely accepted for specifying the pattern of
arrivals, the service time distribution, and the number of channels in a queuing model. This
notation is often seen in software for queuing models. The basic three-symbol Kendall
notation is in the form.
 Arrival distribution/Service time distribution/Number of service channels open

where specific letters are used to represent probability distributions. The following letters are
commonly used in Kendall notation:

M = Poisson distribution for number of occurrences (or exponential times)

D = constant (deterministic) rate

G = general distribution with mean and variance known

1.2.5 Four Basic Queuing System Configurations
Con…
 Con…
 Thus, a single channel model with Poisson arrivals and exponential service
times would be represented by

M/M/1
 An M/M/2 model has Poisson arrivals, exponential service times, and two
channels. When a second channel is added, we would have

M/M/2
 If there are m distinct service channels in the queuing system with Poisson arrivals and
exponential service times, the Kendall notation would be M/M/m. A three-channel
system with Poisson arrivals and constant service time would be identified as M/D/3. A
four-channel system with Poisson arrivals and service times that are normally
distributed would be identified as M/G/4.
 2. MANAGERIAL IMPLICATIONS OF WAITING LINES
 Managers have a number of very good reasons to be concerned with waiting lines.

Those reasons are: -

1. The cost to provide waiting space

2. A possible loss of business should customers leave the line before being served or
refuse to wait at all

3. A possible loss of goodwill

4. A possible reduction in customer satisfaction

5. The resulting congestion that may disrupt other business operations and/or
customer
 3.GOAL OF WAITING-LINE MANAGEMENT
 In a queuing system, customers enter a waiting line of a service facility, receive service
when their turn comes, and then leave the system.
 The number of customers in the system (awaiting service or being served) will vary
randomly over time.
 The goal of waiting-line management is essentially to minimize total costs. There are
two basic categories of cost in a queuing situation: those associated with customers
waiting for service and those associated with capacity. Thus, TC = Customer waiting cost
+ Capacity cost Capacity costs are the costs of maintaining the ability to provide service.
 Examples include the number of bays at a car wash, the number of checkouts at a
supermarket, the number of repair people to handle equipment breakdowns, and the
number of lanes on a highway. When a service facility is idle, capacity is lost since it
cannot be stored. The costs of customer waiting include the salaries paid to employees
while they wait for service (mechanics waiting for tools, the drivers of trucks waiting to
unload), the cost of the space for waiting (size of doctor’s waiting room, length of
driveway at a car wash, fuel consumed by planes waiting to land), and any loss of
business due to customers refusing to wait and possibly going elsewhere in the future.
4.CHARACTERISTICS OF WAITING LINES
 There are numerous queuing models from which an analyst can choose.
Naturally, much of the success of the analysis will depend on choosing an
appropriate model. Model choice is affected by the characteristics of the
system under investigation.

 The main characteristics are:-

1. Population source

2. Number of servers (channels)

3. Arrival and service patterns

4. Queue discipline (order of service)

 4.1 Population Source

 The approach to use in analysing a queuing problem depends on whether the

potential number of customers is limited.
 There are two possibilities:
 infinite-source and
 finite-source populations.
 Infinite-source situation Customer arrivals are unrestricted.
 Finite-source situation the number of potential customers is limited.
 In an infinite-source situation, the potential number of customers greatly exceeds system
capacity. Infinite-source situations exist whenever service is unrestricted. Examples are
supermarkets, drugstores, banks, restaurants, theaters, amusement centers, and toll bridges.
 When the potential number of customers is limited, a finite-source situation exists. An
example is the repair technician responsible for a certain number of machines in a company.
 4.2 Number of Servers (Channels)

 The capacity of queuing systems is a function of the capacity of each server and the
number of servers being used.
 The terms server and channel are synonymous, and it is generally assumed that each
channel can handle one customer at a time. Systems can be either single- or multiple-
channel.
 Examples of single-channel systems are small grocery stores with one checkout
counter, some theaters, single-bay car washes, and drive-in banks with one teller.
Multiple-channel systems (those with more than one server) are commonly found in
banks, at airline ticket counters, at auto service centers, and at gas stations.
 Multiple-channel systems (those with more than one server) are commonly found in
banks, at airline ticket counters, at auto service centers, and at gas stations.
The most common queuing systems.
 4.3 Arrival and Service Patterns
 Waiting lines are a direct result of arrival and service variability. They occur because random,
highly variable arrival and service patterns cause systems to be temporarily overloaded.
 In many instances, the variabilities can be described by theoretical distributions. In fact, the
most commonly used models assume that arrival and service rates can be described by a
Poisson distribution or, equivalently, that the interarrival time and service time can be
described by a negative exponential distribution.
 The Poisson distribution often provides a reasonably good description of customer arrivals
per unit of time (e.g., per hour).
 The negative exponential distribution often provides a reasonably good description of
customer service times (e.g., first aid care for accident victims).
 Waiting lines are most likely to occur when arrivals are bunched or when service times are
particularly lengthy, and they are very likely to occur when both factors are present.
 It is interesting to note that the Poisson and negative exponential distributions are alternate
ways of presenting the same basic information.
 4.4 Queue Discipline

 Queue discipline refers to the order in which customers are processed. All but
one of the models to be described shortly assume that service is provided on a
first-come, first-served basis.
 There is first-come service at banks, stores, theaters, restaurants, four-way
stop signs, registration lines, and so on.
 Examples of systems that do not serve on a first-come basis include hospital
emergency rooms, rush orders in a factory, and mainframe computer
processing of jobs. In these and similar situations, customers do not all
represent the same waiting costs; those with the highest costs (e.g., the most
seriously ill) are processed first, even though other customers may have
arrived earlier.
 5. MEASURES OF WAITING-LINE PERFORMANCE
 The operations manager typically looks at five measures when evaluating
existing or proposed service systems. They relate to potential customer
dissatisfaction and costs:

1. The average number of customers waiting, either in line or in the system

2. The average time customers wait, either in line or in the system

3. System utilization, which refers to the percentage of capacity utilized

4. The implied cost of a given level of capacity and its related waiting line

5. The probability that an arrival will have to wait for service

 of these measures, system utilization bears some elaboration. It reflects the

extent to which the servers are busy rather than idle.
 6.QUEUING MODELS: INFINITE-SOURCE
 Many queuing models are available for a manager or analyst to choose from.
 The discussion here includes four of the most basic and most widely used
models.
 The purpose is to provide an exposure to a range of models rather than an
extensive coverage of the field. All assume a Poisson arrival rate.
 The four models described are:

1. Single server, exponential service time

2. Single server, constant service time

3. Multiple servers, exponential service time

4. Multiple priority service, exponential service time

Infinite-source symbols
 6.1 Basic Relationships

 Certain basic relationships hold for all infinite-source models. Knowledge of these can be very
helpful in deriving desired performance measures, given a few key values. Here are the basic
relationships
 System utilization: This reflects the ratio of demand (as measured by the arrival rate) to supply
or capacity (as measured by the product of the number of servers, M, and the service rate, μ).

ρ=
 The average number of customers being served:

r=
 For nearly all queuing systems, there is a relationship between the average time a unit spends in
the system or queue and the average number of units in the system or queue. According to
Little’s law, for a stable system, the average number of customers in line or in the system is
equal to the average customer arrival rate multiplied by the average time in line or in the
system. That is,

Ls = λWs and Lq = λWq

 Con….
 The implications of this are important to analysis of waiting lines. The relationships are
independent of any probability distribution and require no assumptions about which
customers arrive or are serviced, or the order in which they are served. It also means that
knowledge of any two of the three variable. For example,

 knowing the arrival rate and the average number in line, one can solve for the average waiting time.
 The average number of customers

Waiting in line for service: L q [Model dependent. Obtain using a table or formula.]

In the system (line plus being served): Ls = L q + r

 Con…
 The average time customers are

 All infinite-source models require that system utilization be less than 1.0; the
models apply only to underloaded systems.
 The average number waiting in line, L q , is a key value because it is a determinant
of some of the other measures of system performance, such as the average number
in the system, the average time in line, and the average time in the system. Hence,
L q will usually be one of the first values you will want to determine in problem
solving.
 6.2 Single Server, Exponential Service Time, M/M/1
 The simplest model involves a system that has one server (or a single crew).
 The queue discipline is first-come, first-served, and it is assumed that the
customer arrival rate can be approximated by a Poisson distribution and
service time by a negative exponential distribution.
 There is no limit on length of queue.
6.3 Single Server, Constant Service Time, M/D/1
 As noted previously, waiting lines are a consequence of random, highly variable
arrival and service rates. If a system can reduce or eliminate the variability of
either or both, it can shorten waiting lines noticeably.
 The effect of a constant service time is to cut in half the average number of
customers waiting in line.
Lq=
 Con…
 The average time customers spend waiting in line is also cut in half. Similar
improvements can be realized by smoothing arrival times (e.g., by use of appointments).
Thus, anything a manager can do to reduce service time variability will reduce the
number waiting and the time waiting.

Multiple Servers, M/M/S

 A multiple-server system exists whenever two or more servers are working
independently to provide service to customer arrivals. Use of the model involves the
following assumptions:

1. A Poisson arrival rate and exponential service time.

2. Servers all work at the same average rate.

3. Customers form a single waiting line (in order to maintain first-come, first-served
processing).
 6.4 Multiple Servers, M/M/S

 A multiple-server system exists whenever two or more servers are working independently
to provide service to customer arrivals. Use of the model involves the following
assumptions:

1. A Poisson arrival rate and exponential service time.

2. Servers all work at the same average rate.

3. Customers form a single waiting line (in order to maintain first-come, first-served
processing).

6.5 Cost Analysis

 The design of a service system often reflects the desire of management to balance the cost of capacity
with the expected cost of customers waiting in the system.

 The optimal capacity (usually in terms of number of channels) is one that minimizes the sum of
customer waiting costs and capacity or server costs. Thus, the goal is:

Minimize Total cost = Customer waiting cost + Capacity cost

 6.6 Maximum Line Length

 Another question that often comes up in capacity planning is the amount of space to
allocate for waiting lines. Theoretically, with an infinite population source, the
waiting line can become infinitely long.
 The approximate line length that will satisfy a specified percentage can be
determined by solving the following equation for L max:

L max = or

Were

K=

 The resulting value of L max will not usually be an integer. Generally, round up to the
next integer and treat the value as L max.
 6.7 Multiple Priorities

 In many queuing systems, processing occurs on a first-come, first-served basis.

However, there are situations in which that rule is inappropriate. The reason is
that the waiting cost or penalty incurred is not the same for all customers. In a
hospital emergency waiting room, a wide variety of injuries and illnesses needs
treatment.
 In these systems, arriving customers are assigned to one of several priority
classes, or categories, according to a predetermined assignment method (e.g., in
a hospital emergency room, heart attacks, serious injuries, and unconscious
persons are assigned to the highest priority class; sprains, minor cuts, bruises,
and rashes are assigned to the lowest class; and other problems are assigned to
one or more intermediate classes).
 Customers are then processed by class, highest class first. Within each class,
processing is first-come, first-served.
 7. QUEUING MODEL: FINITE-SOURCE
 The finite-source model is appropriate for cases in which the calling population is
limited to a relatively small number of potential calls. For instance, one person may
be responsible for handling breakdowns on 15 machines; thus, the size of the
calling population is 15. However, there may be more than one server or channel;
for example, due to a backlog of machines awaiting repairs, the manager might
authorize an additional person to work on repairs.
 As in the infinite-source models, arrival rates are required to be Poisson and service
times exponential. A major difference between the finite- and infinite-source
models is that the arrival rate of customers in a finite situation is affected by the
length of the waiting line; the arrival rate decreases as the length of the line
increases simply because there is a decreasing proportion of the population left to
generate calls for service. The limit occurs when all of the population is waiting in
line; at that point the arrival rate is zero since no additional units can arrive.
 8.CONSTRAINT MANAGEMENT
 Managers may be able to reduce waiting times by actively managing one or more system
constraints.
 Typically, in the short term, the facility size and the number of servers is fixed resources.
 Use temporary workers. Using temporary or part-time workers during busy periods
may be possible. Trade-offs might involve training costs, quality issues, and perhaps
slower service than would be provided by regular workers.
 Shift demand. In situations where demand varies by time of day, or time of week,
variable pricing strategies can be effective in smoothing demand more evenly on the
system.
 Standardize the service. We saw the effect of constant service on waiting lines
compared to nonconstant service (the number and time in line were cut in half). The
more service can be standardized, the greater the impact on waiting lines.
 Look for a bottleneck. One aspect of a process may be largely responsible for a slow
service rate; improving that aspect of the process might yield a disproportionate
increase in the service rate. Employees often have insights that can be exploited
 9.THE PSYCHOLOGY OF WAITING
 Despite management’s best efforts, in some instances it is not feasible to shorten
waiting times. Nevertheless, steps can be taken in certain situations that make the
situation more acceptable to those waiting in line, particularly when the waiting line
consists of people.

10.OPERATIONS STRATEGY
 Managers must carefully assess the costs and benefits of various alternatives for
capacity of service systems.
 Working to increase the processing rate may be a worthwhile option instead of
increasing the number of servers. New processing equipment and/or processing
methods may contribute to this goal.
 One important factor to consider is the possibility of reducing variability in
processing times by increasing the degree of standardization of the service being
provided.