Course: Logistics and International Trade

Class: 46K01.2
Group 3
Members: Nguyễn Thị Kim Ngân (22)
Lê Thị Bảo Ngọc (23)
Vy Bảo Ngọc (24)
Đoàn Nguyên Minh Tâm (29)
Phan Thị Hương Trâm (37)

CHAPTER 5 CASE STUDY

Wayne Schuller managed a warehouse in Minnetonka, Minnesota. His major concern
was the number of workers to assign to his single unloading dock. After he began
contracting with motor carriers for deliveries, he found that they were assessing him
stiff penalties if their trucks had to wait to be unloaded. Wayne started adding larger
crews at the unloading dock, but often they seemed idle because there were no trucks
to unload. Wayne recalled from college that queueing theory might be applicable to
such a problem.
The theory of queueing is an analysis of the probabilities associated with waiting in line,
assuming that orders, customers, and so on arrive in some pattern (often a random
pattern) to stand in line. A common situation is that on the average a facility may have
excess capacity, but often it is more than full, with a backlog of work to be done. Often,
this backlog has costs associated with it, including penalties to be paid or customers
who walk away rather than wait. If a firm expands its capacity to reduce waiting times,
then its costs go up and must be paid even when the facility is idle. Queueing theory is
used to find the best level of capacity, the one that minimizes the costs of providing a
service and the costs of those waiting to use the service.
After some further research specific to his firm, Wayne determined the following facts:
1. Trucks arrive randomly at the average rate of 4 per hour, with a deviation of plus or
minus one.
2. A team of two warehouse workers can unload trucks at the rate of 5 per hour, or one
every 12 minutes.
3. A team of three warehouse workers can unload trucks at the rate of 8 per hour, or one
every 7.5 minutes.
4. A team of four warehouse workers can unload trucks at the rate of 10 per hour, or
one every 6 minutes.
5. A team of five warehouse workers can unload trucks at the rate of 11 per hour, or one
every 4.45 minutes.
6. The unloading times given in the preceding items (1–5) are average figures.
7. Each warehouse worker receives $14 per hour, must be paid for an entire shift, and—
because of union work rules—cannot be assigned to other tasks within the warehouse.
8. Because of its contract with the carriers, the Minnetonka warehouse must pay the
motor carriers that own idle trucks at the rate of $60 per hour while the trucks stand
idle, waiting to be unloaded.
Use a software package that enables you to perform queueing operations. Note that the
variable defined as number of servers (# servers) denotes number of teams of workers
and accompanying equipment working as a complete server. In the situation described,
the number of teams or servers is always 1, although the number varies in terms of costs
and output.
Questions
1. For each of the four work team sizes, calculate the expected number of trucks waiting
in the queue to be unloaded.
2. For each of the four work team sizes, calculate the expected time in the queue—that
is, the expected time a truck has to wait in line to be unloaded.
3. For each of the four work team sizes, what is the probability that a truck cannot be
unloaded immediately?
4. Which of the four work team sizes results in the lowest cost to Wayne?

Answers
3.

Equation Source
ʎ
Quantitative Analysis for Management
ρ = utilization factor for the system =
µ
(13E, 2018), Chapter 13 • Waiting lines
λ = mean number of arrivals per time
and queuing theory models, Equation 13-
period
5, p.521
µ = mean number of people or items
served per time period

ʎ = arrival rate of customers

µ = service rate of the server
arrival rate ʎ
ρ= = (propability of not being unloaded immediately)
service rate µ

λ = 4 per hour, with a deviation of plus or minus one.

A team of two warehouse workers can unload trucks at the rate of five per hour, or one
every 12 minutes.
µ = rate of 5 per hour
Pw = Probability that a truck cannot be unloaded immediately = 4/5 = 0.8
A team of three warehouse workers can unload trucks at the rate of eight per hour, or
one every 7.5 minutes.
µ = rate of 8 per hour
Pw = Probability that a truck cannot be unloaded immediately = 4/8 = ½ = 0.5

A team of four warehouse workers can unload trucks at the rate of 10 per hour, or one
every six minutes.
µ = rate of 10 per hour
Pw = Probability that a truck cannot be unloaded immediately = 4/10 = 2/5 = 0.4

A team of five warehouse workers can unload trucks at the rate of 11 per hour, or one
every 4.45 minutes.
µ = rate of 11 per hour
Pw = Probability that a truck cannot be unloaded immediately = 4/11 = 0.36

Probability that truck must wait upon

Size of team
arrival
2 80%
3 50%
4 40%
5 36%

4.

Equation Source
Total cost = Waiting time cost based on Quantitative Analysis for Management
time in the system = mCs + λWCw (13E, 2018), Chapter 13 • Waiting lines
Total service cost = mCs and queuing theory models, Equation 13,
where p.521
m = number of channels
Cs= service cost (labor cost) of each
channel
Cw = cost of waiting
𝐿
W=
𝜆
Average time a unit spends in the waiting
line or be-ing serviced (namely, in the
system)
𝜆
L = average number of units
µ−𝜆
(customers) in the system
Total cost = mCs + λWCw
𝐿
= mCs + λ Cw = mCs + L Cw
𝜆
𝜆
= mCs + Cw
µ−𝜆

Cs = $14, worker receives $14 per hour

λ = 4 per hour, arrival rate of customers
Cw = $60 per hour while the trucks stand idle, waiting to be unloaded.

A team of two warehouse workers (m = 2); µ = service rate of 5 per hour

𝜆
Total Cost to Wayne = mCs + Cw
µ−𝜆
4
= 2 * 14 + * 60
5−4
= 28 + 4 * 60 = 28 + 240
= $268 per hour

A team of three warehouse workers (m = 3); µ = service rate of 8 per hour

𝜆
Total Cost to Wayne = mCs + Cw
µ−𝜆
4
= 3 * 14 + * 60
8−4
= 42 + 1 * 60
= $102 per hour

A team of four warehouse workers (m = 4); µ = service rate of 10 per hour

𝜆
Total Cost to Wayne = mCs + Cw
µ−𝜆
4
= 4 * 14 + * 60
10−4
2
= 56 + * 60 = 56 + 40
3
= $96 per hour

A team of five warehouse workers (m = 5); µ = service rate of 11 per hour

𝜆
Total Cost to Wayne = mCs + Cw
µ−𝜆
4
= 5 * 14 + * 60
11−4
4
= 70 + * 60 = 70 + 34,29
7
= $104 per hour
 Size of team Total cost
2 $268
3 $102
4 $96
5 $104

A team of four warehouse workers results into the lowest cost (USD 96 per hour) to
Wayne.