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PROCESS DESIGN ISSUES
OPERATIONS RESEARCH
SERVICE SYSTEM DESIGN
DESIGN OF SERVICE SYSTEMS: DIFFERENT FROM MANUFACTURING
• Design of service operation systems typically involves making choices with
respect to location, technology, capacity and layout of the system.
• In most service systems customer participation in the conversion process is
inevitable.
• It requires the designer to incorporate customer as an integral element in the design
process.
• Designing services requires looking at tiny details that pleases the customer
• Another aspect of services is the need to address the issue of personalization
• Nature and level of interactions of the service provider with the customer
• Alternatives available for positioning the service
• Factors influencing service positioning and implications of this on the overall service
delivery design
• Overall level of technology to be used
• Identifying the elements of a front office and back office of this service delivery
system
• Design of the service delivery system areas
• Layout of the service delivery system - areas that need greater attention with respect
to look and feel
• Capacity of the service delivery system areas –
• Estimating this given a certain uncertainty in the arrival pattern and the demand for the
restaurant services
PROCESS DESIGN ISSUES: SERVICE SYSTEMS
• Customer contact signifies
• the extent to which customer participates in the preparation and consumption of service
• the nature and intensity of interaction that the customer has with the entities and
service personnel
• the level of exposure that the customer has of the various facets of the service system
while the customer is receiving the service
• Degree of complexity refers to the steps and sequences in the process
measured by the number and intricacy of the steps
• Degree of divergence indicates the executional latitude or variability of these
steps and sequences
• All the three influence the service process design

DEGREE OF CUSTOMER CONTACT: DESIGN IMPLICATIONS
• Efficiency of Operations
• Capacity Decisions
• Facility Location Choices
• Control of Operations
• Effectiveness Vs Efficiency Goals
DEGREE OF DIVERGENCE
Low cost Airline
Air Ticket, Insurance
Low cost fare
Economy
On board sale of limited snacks
None
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DEGREE OF COMPLEXITY
Low cost airline
Full fare airline
Provide alternative
Provide alternative
options & Schedules options & Schedules
Ticketing
Schedule Selected Schedule Selected
Seat Selection Payment
Meal Preferences
Payment or
Miles Redemption
Obtain Boarding Obtain Boarding
Check in & Board
Pass Pass
Thru Check in Board Flight
for onward Travel
Update Frequent
Flier Details
Use of Lounge Facilities
Board Flight
DEGREE OF COMPLEXITY & DEGREE OF DIVERGENCE
Low complexity/Divergence Process Description High Complexity/Divergence
Nature of the service Full Fare Airline
No reservation Table Reservation Specific table selection options offered
Online Booking Air Ticket, Insurance, Hotel,
Airport Transfer, Cab for local Self seating, Menu on the board Seating Guests, Offering Menus
Recite Menu, Describe in detail all starters
travel
& other special items in offer for the day
Fare Options Non-refundabe, APEX
Serve Water & Starters at the beginning of Assortment of salads, chips and fruit juices
Eliminate
the service offered
(Restricted), APEX (Normal), Order takers interact with the customers at
Economy, Full Fare Customer calls out his requirements Order taking process the table in constructing the menu for the
guests
Cabin Class Economy, Club Class, First Class, Individually prepared and served at the
Business Class Pre-prepared: Fixed set of offering Salads, Papads
table as per request
Meal Preferences Asian Veg. meal, Non. Veg. Meal, Just 2 or 3 choices offered Starters
Customers can choose from 20
alternatives
Jain Meal, Diet Meal, Fruit South Indian, Jain, Tandoori, Chinese,
Platter, Choice of Beverages Only South Indian (Vegetarian) Main Menu Continental, Brazilian (Both vegetarian &
non-vegetarian)
Airport Services Valet, Lounge, Special Assistance Payment at the counter while leaving Multiple choices of payments (Cash, Card,
Cash Payment
(Cash only) Coupons etc.)
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SERVICE POSITIONING SERVICE POSITIONING & DELIVERY SYSTEM DESIGN

Degree of Interaction
• Three parameters contact, divergence and complexity pertaining to the service
we offer determine service delivery system design
Low High
Low
No frill

• Service positioning is the strategic choice a firm makes on the above three
Fast-food
Airlines Joints

parameters
Restaurants
Online Airlines

• Service blue printing helps organisations to design, monitor, control and

Retailers
Degree of Labour Intensity

Budget

improve processes and the service delivery system on an ongoing basis

Internet & Phone Hotels Ethnic & High End
Banking
Eating Places

For-profit Five Star

Hospitals Hotels
Traditional
Retailing Traditional
Banking
Boutique
Personal Hospitals
Banking

High

SERVICE BLUE PRINTING CAPACITY PLANNING UNDER UNCERTAINTY: WAITING LINE MODELS
• Often demand placed on resources is uncertain making capacity requirement
Preliminary Activities Meet the Doctor Post-consultation

Front Office
estimation difficult
• In such cases, waiting line models
Patient meets Advise Patient leaves
Patient calls for Receptionist
the Doctor Prescription the hospital
an appointment Interaction

Registration Cause
yes
• make use of queueing theory fundamentals
Line of
• to analyse the impact of alternative capacity choices
Patient arrives Pharmacy Billing &
Payment Clear?
visit Payment
Interaction n

• on important operational measures such as queue length, waiting time and utilisation of
o

resources
Patient waits
for his/her turn

• In service systems, waiting time is an important operational measure that

Line of
Diagnostic
tests done determines the service quality
• Computerised passenger reservation facility of Indian Railways
Visibility

Back Office • Banking system or BSNL’s bill payment counters

Receptionists checks Patient file Analysis Extract medicines
& confirms the appointment Extracted Reporting As per prescription
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QUEUING SYSTEM: TERMS QUEUING SYSTEM: QUEUE BEHAVIOURS

• Customer: An arriving unit that needs some service • Jockeying
• Queue / Waiting Line: Point where customers accumulate waiting for the • Customers switching between queues
service. • Balking
• Doesn’t include the customers who have been served or going through serving process. • Customers refusing to join the queue because of its length
• Service Channel: Process or System that performs services for the customers. • Reneging
• Queue Length: Number of customers present in the queue. • Customer in the queue who leave in anticipation of longer waiting time

Calling
Population
Arrivals
Waiting Line Server Served
customers

QUEUING SYSTEM: CHARACTERISTICS QUEUING SYSTEM: CHARACTERISTICS

• Queueing Model
• Input Process
• Model to represent a service oriented problem where customers arrive randomly to receive
• Mode of arrival of customers at the service facility some service, with service time also being a random variable.
• Number of customers may be finite or infinite • Arrival Distribution: (general distribution), λ (Poisson distribution)
• Arrival in batches or continuously • Service Distribution : (general distribution), μ (Exponential / Poisson distribution)
• Service Mechanism • Kendall’s Notation
• Arrangement of service facility to provide service to the customers • System of notation defining the characteristics of a queueing model
• Service facility / Server – finite / infinite / unique • A General Queueing Model: (a / b /c ) : ( d / e / f )
• Queue Discipline • a: Type of distribution for Inter-arrival Time
• Rule for customer service • b: Type of distribution for Service Time
• FCFS / FIFO / LIFO / SIRO (Selection Inservice at Random Order) • c: Number of servers (service channels) in the system
• d: Maximum number of customers allowed in the system (System Capacity)
• e: Size of the calling population (Source) of customers
• f: Queue Discipline
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QUEUING SYSTEM QUEUING SYSTEM

Infinite • Single-Channel Structures
Calling Population
Finite

Arrival Parameters Rate Markovian, General Distbn., Deterministic

Single-server, single-stage
Pattern Single, Bulk, Special group
Queue
Parameters
FCFS, LCFS, Random, Balk, Renege, Jog Waiting line Server
Servers Single, Multiple
Stages Single, Multiple
System Structure Single-server, multiple stages
& Parameters Routing Single, Serial, Network
Capacity Finite, Infinite
Service
Waiting line Servers
Markovian, General Distbn., Deterministic
Parameters
Performance Queue length, Waiting time, Utilisation,
Metrics Cost based

QUEUING SYSTEM QUEUING SYSTEM: (M/M/1): (Ꝏ/ Ꝏ /FIFO)

• Multi-Channel Structures • Single Server Queue: Formulae for Lq
• Ls Average number of customers in the system (waiting and being served)
Multiple-servers, single stage
• Lq Average number of customers in the waiting line (waiting to be served)
• Ws Average time a customer spends in the system (waiting and being served)
Servers • Wq Average time a customer spends waiting in line (waiting to be served)
• λ Mean arrival rate
Multiple-servers, multiple-stages
• μ Mean service rate
• S Number of servers in a multi-server queue
Waiting line
Single server Queue 
Servers Lq =
(Exponential service time) 
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QUEUING SYSTEM : (M/M/1): (Ꝏ/ Ꝏ /FIFO)

• Single Server Queue: Performance Metrics and Relationships The arrival rate of customers at a bank with single cash counter follows Poisson
• Server utilisation distribution with mean 45 customers/hour. The service rate of the counter clerk
• In the case of single server:  also follows Poisson distribution with mean 60 customers/hour.


i) What is the probability of having 0 customers in the system?

• In the case of multiple servers: 
S ii) What is the probability of having 5 customers in the system?
• Little’s Formula iii) What is the probability of having 10 customers in the system?
Ls
• Average time customer spends in system W s = 
iv) Find Ls, Lq, Ws and Wq.
Lq
• Average time customer spends in queue Wq =

• In the case of a Single Server 
• Average number of customers in system Ls = Lq +


A harbour has single dock to unload the containers from the incoming ships. The
arrival rate of ships at the harbour follows Poisson distribution and the unloading
time for the ships follows exponential distribution and hence the service rate
also follows Poisson distribution. The arrival and service rate are 8 ships/week
and 14 ships/week respectively. Find utilization factor, Ls, Lq, Ws and Wq.
A company distributes its products by trucks loaded at its only loading station.
Both, company’s trucks and contractor’s trucks are used for this purpose. It was
found that on an average every 5 minutes one truck arrived and the average
loading time was 3 minutes. 50% of the trucks belong to the contractor.
Assuming arrival and service rate as Poisson, find-
a) Waiting time of trucks in the system
b) Expected waiting time of contractor’s trucks per day (before being loaded)
considering a 24 hour shift.
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CAPACITY DESIGN: FLEXIBILITY/UTILIZATION TRADE-OFF

A Maruti Suzuki Service Centre has a central store, where mechanics arrive to
take spare parts for the jobs that they are working upon. The mechanics wait in High utilization
queue, if the storekeeper is busy serving another mechanics, whenever required. Low cost of operation

The service is on FIFS basis. Presently, the store is manned by one storekeeper Poor service

and he can attend on average 10 mechanics per hour. The arrival rate of

Operational Performance
mechanics is 8 mechanics per hour. Assuming that the arrival pattern of
mechanics is Poisson distributed and servicing time is exponentially distributed,
determine the time spent by the mechanics in the system, time spent by the

Measures
mechanics in waiting and the average queue length. Suppose the service
mechanics are paid an hourly wages of Rs. 500 and the store keeper is paid an
hourly wage of Rs. 300, would you support the decision to recruit one additional Low utilization

store keeper, when the service rate would improve to 14 mechanics/hour with
High cost of operation
Good service
the additional storekeeper? Assume the number of mechanics to be sufficiently
large and duration of the shift is 8 hours. 0 Utilization 100%

CAPACITY DESIGN: COST RELATIONSHIP QUEUING SYSTEM : (M/M/C): (Ꝏ/ Ꝏ/FIFO)

• Server utilisation =

• =

• Length of Queue =
Total cost !( )
Expected costs

• = ∑ +
! !( )
Service
0≤ ≤
• = !
cost

>
Waiting Costs !

Level of service • Probability of waiting in the system: ; where = !

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At a central warehouse, vehicles arrive at the rate of 18 per hour and the arrival
rate follows Poisson distribution. The unloading time of the vehicles follow
exponential distribution and the unloading rate is 6 vehicles per hour. There are
4 unloading crews. Find p0, p3, p5, Lq, Ls, Wq and Ws.
(Solution: 0.0377; 0.1697; 0.0954;
1.527 vehicles; 4.527 vehicles;
0.085 hrs / 5.09 minutes; 0.252 hrs / 15.12 minutes)
There are three clerks in the loan section of a bank to process the initial queries
of the customers. The arrival rate of customers follows Poisson distribution (20
customers per hour). The service rate also follows Poisson distribution (9
customers per hour). Find,
a) Average waiting number of customers in the queue and the system.
(Solution: 1.43 customers; 3.65 customers)
b) Average waiting time per customer in the queue and the system. (Solution:
0.0715 hrs / 4.29 minutes; 0.1827 hrs / 10.96 minutes)

MULTI-SERVER QUEUES: APPROXIMATION BASED ON DATA

A telephone exchange has two long distance operators. The telephone company _
finds that during the peak load, long distance calls arrive in a Poisson fashion at _
X_a Mean Inter-Arrival Time (IAT)
an average rate of 15 per hour. The length of service on these calls is Xs Mean Service Time (ST)
approximately with mean length of 5 minutes. Sa Standard deviation of inter-arrival time
Ss Standard deviation of service time _
a) What is the probability that a subscriber has to wait for long distance call Ca Coefficient of variation of IAT = Sa/X_a
during the peak hours of the day? (Solution: 0.4808) Cs Coefficient of variation _of ST = Ss/Xs
b) If the subscriber will wait and be serviced in turn, what is the expected  Mean arrival rate = 1/ X _a
waiting time? (Solution: 0.0534 hr / 3.21 minutes)  Mean service rate = 1/ Xs
 Utilisation of the ‘s’ servers = /S
  C 2  C s2 
2( S 1)
Lq  * a 
(1   )  2 

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CAPACITY MANAGEMENT: SERVICES

Prolonged observation of a multi-server facility in a super market resulted in the
Issue for Peak Hour Non-Peak Hour
collection of some data with respect to customer arrivals at the supermarket and
consideration
the service time at the checkout counter. Based on 100 observations, the mean
interarrival time was 0.75 minutes with a standard deviation of 0.25 minutes and Operations strategy Standard offering configure to Customized order
the mean service time was 3.25 minutes with a standard deviation of 2.25 order
minutes. The data is representative of the situation prevailing in the Service portfolio Narrow offering Wide offering
supermarket. Currently, there are five checkout counters in the supermarket. The
supermarket wants to know if reducing the variability of service process by 25 Demand mgmt. Reservations Special tariffs, offers
percent is better than adding one more counter at the shop. Compute the
Resources • Multi-skilled labour • Dedicated tasks
relevant operational performance measures for the supermarket and advise.
management • Adding temporary work • Training &
force development
• Increased working time • Reduced working time