Calculate the average waiting time per order.

2. The managers enquired about the source of for waiting time and have asked for your suggestions
to minimize this. How would you respond?
3. Management is expecting sales to increase. Will average waiting time increase or decrease?
Explain briefly.
4. If a second machine with the same capacity is purchased, how will average waiting time be
affected? Explain briefly and show calculations if necessary.

SOLUTION

(25min.)   Waiting time.

1.

= (18,000 × (20/60)²) / (2 × (7,200 – (18,000 × (20/60)))) hrs

= 2,000 / (2 × (7,200 – 6,000)) hrs

= 2,000 / 2,400 hrs = (2,000/2,400)×60 minutes = 50 minutes

1. Even though TFF expects to utilize only 6,000 hours of the 7,200 hours of capacity
available, queues can form due to two reasons. These are: (1) TFF expects to receive 18,000
orders, but it may receive more than that (say 22,000 orders). (2)  TFF may receive orders
while it is processing other orders. For example, TFF may receive three orders as soon as it
starts processing an order. In this case, the first order would have to wait for 20 minutes until
manufacturing of this order is completed; the second order would have to wait another 20
minutes until the first order is completed (for a total of 40 minutes); the third order would
have to wait yet another 20 minutes until the second order is completed (i.e., for a total of 1
hour). 
The denominator in the formula is a measure of the unused capacity, or cushion. As the
unused capacity becomes smaller as a result of TFF receiving more orders, the chance that the
machine is processing an earlier order when a new order arrives becomes more likely, leading to
greater delays. 
Management can take a number of actions to reduce wait times:
a. Increase the annual capacity by purchasing another machine. This will, of course,
increase costs.
b. Work with customers to facilitate the receipt of orders throughout the year or produce for
inventory rather than only when an order is received. This will increase inventory holding
costs. 
c. Work with process engineering to reduce manufacturing time. 
 In each of these cases, the management would have to consider the benefits of reducing
wait times against the costs.
 
3. If sales increase, the average waiting time will increase because the cushion provided by
unused capacity will become smaller, and the chance that the machine is processing an
earlier order when another order arrives becomes more likely, resulting in greater delays.

4. If a second machine is purchased, average waiting time will decrease from 50 to 7

minutes because the denominator will increase from 2,400 to 16,800 as a result of
doubling the annual machine capacity. That is likely to have a dramatic impact on
waiting times, but may not eliminate them for the reasons discussed in part (2). 

19-25 Waiting time, service industry. The registration advisors at the Brunendorf University
(BU) in Berlin help 4,200 students develop their class schedules and register for classes each
semester. Each advisor works for 10 hours a day during the registration period. BU currently has
10 advisors. While advising an individual student can take anywhere from 2 to 30 minutes, it
takes an average of 12 minutes per student. During the registration period, the 10 advisors see an
average of 300 students a day on a first-come, first-served basis.

Required:
1. Using the formula for average waiting time, calculate how long the average student will have to
wait in the advisor’s office before being advised.
2. The head of the registration advisors would like to increase the number of students seen each day
because at 300 students a day it would take 14 working days to see all the students. This is a
problem because the registration period lasts for only 2 weeks (10 working days). If the advisors
could advise 420 students a day, it would only take 2 weeks (10 days). However, the head
advisor wants to make sure that the waiting time is not excessive. What would be the average
waiting time if 420 students were seen each day?
3. BU wants to know the effect of reducing the average advising time on the average wait time. If
BU can reduce the average advising time to 10 minutes, what would be the average waiting time
for each student if 420 students were seen each day?

SOLUTION

(30 min.)   Waiting time, service industry.

1. If BU’s advisors expect to see 300 students each day and it takes an average of 12
minutes to advise each student, then the average time that a student will wait can be calculated
using the following formula:
 =    

=    =  9 minutes