Session 5 Waiting Line Management

SMU Classification: Restricted
OPIM 201 OPERATIONS MANAGEMENT
WAITING LINE MANAGEMENT

(C&T, Ch. 9)
Dr. Wee Kwan Eng Slide 1 OPIM 201, SMU

Learning Objectives
 Evaluate several performance measures in waiting time management,
understand the factors that influence those measures and suggest ways to
reduce waiting times in processes.
 Understand why there are economies of scale in queuing systems, and the
pros and cons of pooling.

Motivating Example: Impact of Variability

What is the average system cycle time for each of the following two-stage lines?
(1) Processing time at each stage is 1 minute.
CT?
1 1
Stage A Stage B
(2) Processing time at Stage B is 1 minute and at stage A is uniformly distributed

between 0.5 minute and 1.5 minute, with an average of 1 minute.
[0.5, 1.5] 1 CT compared to Case 1?
Stage A Stage B
(3) Processing time at Stage B is 1 minute and at stage A is uniformly distributed

between 0.2 minute and 1.8 minute, with an average of 1 minute.
[0.2, 1.8] 1 CT compared to Case 2?
Stage A Stage B

Blocking: A station is considered blocked if it has finished a unit but cannot move the
unit to the next station in the line. A blocked station is not working on a new unit, and
therefore there is loss of productivity.
Unit 2 Unit 1
Stage A Stage B
Unit 2 is completed but unit 1 is still being processed at the second workstation
Starving: A station is considered “starved” if it is empty and does not have a unit to
work on. Since a starved station does not have a unit to work on, there is loss of
productivity.
Unit 2 Unit 1
Stage A Stage B
Unit 1 is completed but unit 2 is still being processed at the first workstation
Solution?

 Variability often leads to loss of productivity or effective capacity – the
higher the degree of variability, the larger the loss of effective capacity.
 One way to address this loss of effective capacity is to introduce buffer

inventory (e.g., waiting space in service industry). However, in the context
of service industry, this typically implies the formation of waiting line or
queue.

Where the time goes
In a lifetime, the average American will spend --
SIX MONTHS Waiting at stop lights

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



Deterministic Arrival & Consultation Time
Arrival Service
Patient
Time Time
1 0 4
2 5 4
3 10 4
4 15 4
5 20 4
6 25 4
7 30 4
8 35 4
9 40 4
10 45 4
11 50 4
12 55 4
interarrival time: 5 7:00 7:10 7:20 7:30 7:40 7:50 8:00
service time: 4
No Waiting! Resource utilization is less than 100%.
A More Realistic Service Process
Patient 1 Patient 3 Patient 5 Patient 7 Patient 9 Patient 11

Arrival Service
Patient
Time Time Patient 2 Patient 4 Patient 6 Patient 8 Patient 10 Patient 12
1 0 5
2 7 6
Time
3 9 7
7:00 7:10 7:20 7:30 7:40 7:50 8:00
4 12 6
5 18 5
6 22 2 3
7 25 4
8 30 3 2
9 36 4
Number of cases
10 45 2 1
11 51 2
12 55 3
0
avg. interarrival time: 5 2 min. 3 min. 4 min. 5 min. 6 min. 7 min.

Service times
avg. service time: 4

Variability Leads to Waiting Time
Arrival Service
Patient
Time Time
Service time
1 0 5
2 7 6
3 9 7
4 12 6 Wait time
5 18 5
6 22 2
7 25 4
7:00 7:10 7:20 7:30 7:40 7:50 8:00
8 30 3
5
9 36 4
4 Inventory
10 45 2 (Patients at lab)
3
11 51 2
2
12 55 3
1
avg. interarrival time: 5
avg. service time: 4 0
7:00 7:10 7:20 7:30 7:40 7:50 8:00
So …
 If there is no variability, there will be no waiting if resource utilization is less
than 100%.
 However, due to arrival and/or processing variability, even when resource
utilization is less than 100% flow units may have to wait
 In the service industry:
 Demand can always accumulate in the form of waiting flow units when
the resource is busy, BUT
 Supply cannot accumulate (i.e. get ahead of demand) when there are
no flow units waiting.
 So supply can always get behind on demand but it can never get ahead
of demand.
 In the face of variability this means supply will on occasion be in catch-
up mode, with flow units waiting, even when resource utilization is less
than 100%.

Variability: Where Does It Come From?

 Consider a simple arrival & service process.
 Arrival Process: The flow of customers arriving to the system.
 Service Process: The flow of customers when they are being served.
 Interarrival time: The time between customers arrivals to a system.
 Processing Time: The time a customer spends with a server.
Tasks:
• Inherent variation
• Lack of Standard Operating Procedures
• Quality (rework)
Arrival
Buffer Processing
Arrival Input:
• Unpredicted Volume swings Resources:
• Random arrivals (randomness • Breakdowns / Maintenance
is the rule, not the exception) • Operator absence
• Incoming quality • Set-up times
• Product Mix
Beau Ties Ltd – Call Center Problem
www.beautiesltd.com

Beau Ties Ltd – Call Center Problem


What should the staffing (capacity) plan be?

What are the factors to consider in this decision?
How To Measure Variability?

 Standard Deviation
 An absolute measure of variability
 Measure how an arrival (or service) process fluctuates about its average
arrival (service) time
 Two processes can have the same average inter-arrival time but one
can have more variation about the average, i.e., a higher standard
deviation.
Average = 100
250
200
Inter-arrival time (min)
150
stdev = 10
100
stdev = 50
50
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Observation

A More Appropriate Measure of Variability …
 Coefficient of Variation (CV) =
 A relative measure of variability
 Arrival Process:
 Service Process:
 Recall that Days of Supply (or inventory turn = ) is a better

assessment of inventory than inventory itself. Similarly, CV is a better
assessment of variability than standard deviation.

Absolute versus Relative Variability
 The following two processes have the same standard deviation but different
average; their impacts on the waiting line would be different, ceteris paribus

Absolute versus Relative Variability (cont’d)
 Here, we plot the same processes relative to their average; it is clear that
one process is relatively more variable than the other.

Waiting Line Model a avg. interarrival time

1/a avg. interarrival rate
p avg. service time
1/p avg. service rate

Inflow Outflow
1/a Ave. inventory 1/a
waiting in queue, Iq Avg. inventory
in service Ip
Entry to system Begin Service Departure
Avg. waiting time in queue Tq Service time p
Avg. time in system (Flow Time) T=Tq+p
DECISION: Demand is given; but we have control over Supply (capacity)

 Service/Processing rate of each server (1/p)
 number of servers (m)
OBJECTIVE? Target Tq or T
Predicting Time in Queue Tq

Inventory  Increase effective capacity (m/p) 
waiting Iq decrease Tq
• Effective capacity (or effective service time)
Inflow Outflow can be improved by reducing p or increasing
m; it affects Tq directly and indirectly via
utilization;
Entry to system Begin Service Departure  Reduce utilization  decrease Tq
• Average demand influences Tq via utilization,
Time in queue Tq Service Time p which is the ratio of demand to effective
capacity
Flow Time T=Tq+p
 Reduce variability (CV)  decrease Tq
(holding average demand constant)
Waiting Time Formula (Kingman's formula):
Effective Capacity Factor Utilization Factor Variability Factor
( )
where utilization = = = ×
)
Why the long queues for the women’s restroom?
( )
Typically, women’s rooms & men’s rooms are “equal” in terms of physical area
Potty-parity Laws
 Women’s Restroom Equity Bill:

 Passed NY City Counsel May 2005.
 Requires women’s restrooms to have
twice the flushing capacity of men’s
restrooms (at least a 2:1 ratio of women’s
toilets to men’s toilets & urinals)
 In the context of Time in queue equation,
this law requires m to increase for
women, which decreases the capacity
factor (p/m) and decreases utilization.
( )
 Other solutions:
 Unisex restrooms (pools capacity, at least
the toilets)
 Flexible partitions that can change the
×
size of each restroom.

Waiting Line Model in Call Center: Create a Staffing Plan

Number of customers per 15 minutes
160
140
120
100
80
60
40
20
0
0:15
2:00
3:45
5:30
7:15
9:00
14:15
16:00
17:45
19:30
21:15
23:00
10:45
12:30
Time
 Seasonality (predictable variation) vs. variability (unpredictable variation)

• The peaks and troughs are predictable (they occur roughly at the same time each
day. But the number of arrivals during the peaks or troughs is unpredictable &
depends on which interval your choose
 Need to time-slot (slice-up) the data, and apply waiting line model in each time slot
 Choose m to meet Tq requirements for each time-slot to create staffing plan
 Additional constraints: min & max shifts, breaks, weekly schedules etc
Case Study: Beau Ties Ltd – Staffing Plan

Beau Ties is a mail order firm that sells luxury ties. It outsources its phone ordering
service, which operates from 7am to 9pm everyday, to a third party phone service
company, Vonage. Vonage charges Beau Ties a flat fee of $0.60 for each minute a
customer is on the line, including both hold time and service time (customers are put
on hold when all the lines are busy).
Beau Ties is considering bringing its phone ordering service in-house. It estimates the
average service time per customer is 3 minutes with a standard deviation of 4 minutes.
Table 1 presents the number of calls per hour on December 10, 2019. Assume CVa
equal 1. The hourly wage of an operator is $6. Suppose Beau Ties has a target average
customer waiting time, Tq of 1 minute.
Time # of Customers Time # of Customers

7-8 5 14-15 7
8-9 7 15-16 6
9-10 7 16-17 8
10-11 8 17-18 10
11-12 9 18-19 3
12-1 17 19-20 3
13-14 12 20-21 1
Table 1. December 10, 2019
Checking Your Understanding

Suppose Beau Ties brings its phone ordering service in-house. Determine the
minimum of operators to be hired for the time slot 7am – 8 am so that Beau
Ties can meet the target average customer waiting time of 1 minute.
CVp =
For m =1,
⁄
utilization = = = = = 0.25.
( ) × ( )×
( ) . ( ) ( )
Tq = = .
 1.39 minutes.
For m = 2,
utilization = =
×
Tq =
Hence Beau Ties needs operators.

Beau Ties Ltd – Staffing Plan (cont’d)

Determine an optimal hourly staffing plan for Dec. 10, 2019 that would satisfy the
target average customer waiting time. (See Excel Spreadsheet)
Time # of Customers a p m utilization Tq (min)
7-8 5
8-9 7
9-10 7
10-11 8
11-12 9
12-1 17
13-14 12
14-15 7
15-16 6
16-17 8
17-18 10
18-19 3
19-20 3
20-21 1
Discuss: Beau Ties Ltd – Staffing Plan

a) How should Beau Ties determine the staffing plan for year 2020? Should Beau Ties
determine an hourly staffing plan for each day of year 2020?
b) How should Beau Ties evaluate the decision to bring the phone order service in-
house? What are the factors to consider in the decision? What are the conditions
under which outsourcing is more viable?

Predicting the Number of Customers in Queue

 From Little’s Law (Inventory = Flow Rate  Flow Time ),
Average # of customers waiting: q = q
Average # of customers in service: p =
Average # of customers in system: = p + q = )

Service Configuration & Effect of Pooling

An on-line retailer serves two different markets; demand from each market is 4
customers per hour. It is considering the following three service layouts to
better serve its customers.
(A) Two Servers and Two Separate Queues
• Hire two average servers, each dedicated to one market and is capable
of serving 5 customers per hour
(B) Two Servers but One Combined Queue
• Hire two average servers serving both markets, each server capable of
serving 5 customers per hour.
(C) One Super-Server and One Combined Queue
• Hire one well-trained server (at the cost of two average servers) serving
both markets and is capable of serving 10 customers per hour.
Assume CVa = 1 and CVp = 1.
Which layout offers the better customer service?

Service Configuration & Effect of Pooling (cont’d)

(A) Two Servers and Two Separate Queues
1/a = 4 per hour  1/p = 5 per hour
(B) Two Servers but One Combined Queue

1/p = 5 per hour
1/a = 8 per hour 
1/p = 5 per hour
(C) One Super-Server and One Combined Queue

Service Configuration & Effect of Pooling (cont’d)

Layout A Layout B Layout C
  

m
Utilization
Tq
( )
𝑞 =
×

Layout B vs. Layout A
2 1 1
Layout A Layout B
 Both systems currently have 2 customers.

 Under Layout B (pooled system), both servers are busy and nobody is waiting.
 Under Layout A (separate queue system), 1 server is idle while 1 customer is
waiting.
 Layout A (separate queue system) is inefficient because there can be
customers waiting and idle servers at the same time.

Layout B vs. Layout C
1
2 1
2
Layout C Layout B
 Both systems currently have 2 customers

 Under Layout B (pooled system), both servers are busy but nobody is waiting
 Under Layout C (super server), 1 customer is waiting despite a faster server.
Hence Tq is larger under Layout C.
 Customer 1 spends less time in the system under Layout C (6 minutes) than
under Layout B (12 minutes); whereas Customer 2 spends the same amount
of time under both layouts (12 minutes). Hence T is smaller under Layout C.

Example: Fairprice

Pooling in Practice – Quick Service Restaurants Pool Drive-

through Ordering
 The person saying “Can I take your
order?” may be hundreds (or even
thousands) of miles away:
 Pooling the order taking process can
improve time-in-queue while
requiring less labor.
 It has been shown that queue length
at the drive through influences
demand – people don’t stop if the
queue is long.
 Partial pooling – pool the order
taking process but not the order
delivery process
 However, this system incurs
additional communication and
software costs.
Limitations to Pooling
 Pooling may require workers to have a broader set of skills, which may
require more training and higher wages:
 Imagine a call center that took orders for McDonalds and Wendy’s; now
the order takers need to be experts in two menus.
 Suppose cardiac surgeons need to be skilled at kidney transplants as
well.
 Pooling may disrupt the customer – server relationship:

 Patients like to see the same physician.
 Pooling may increase the time-in-queue for one customer class at the
expense of another:
 Removing priority security screening for first-class passengers may
decrease the average time-in-queue for all passengers but will likely
increase it for first-class passengers.

Psychology of Waiting
Fairness (FCFS)?
Social Justice?

Psychology of Waiting
Clock ?
OR
Mirror ?

Managing Waiting Systems: Points to Remember

 Variability is the norm, not the exception
 When there is variability, waiting is inevitable even if utilization < 100%
 We cannot obtain 100% utilization at the bottleneck
 Use the Waiting Time Formula to
 Get a qualitative feeling of the system
 Analyze specific recommendations / scenarios
 Set capacity levels to create the right balance between utilization and
responsiveness
 Managerial response to variability:
 Understand where it comes from and eliminate what you can
 Accommodate the rest by holding excess capacity

Opportunity for Improving Process Performance

 Pool resources, cross-train employees, share capacity (m ↑)
 Reduce rate of arrivals (a ↑)
 Self-service options (e.g. kiosks or online check-in for airlines)
 Reduce randomness of arrivals (CVa ↓)
 Appointment systems
 Reduce the duration and randomness of processing time (p↓, CVp ↓)
 Standardization, training
 Difference between variability and seasonality
 Address seasonality by staffing to (expected) demand – provide time-
varying capacity levels that match the seasonality of demand (or reduce
seasonality with price incentives)

Session 5 Waiting Line Management

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SMU Classification: Restricted

OPIM 201 OPERATIONS MANAGEMENT

WAITING LINE MANAGEMENT

Dr. Wee Kwan Eng Slide 1 OPIM 201, SMU

Dr. Wee Kwan Eng Slide 2 OPIM 201, SMU

Motivating Example: Impact of Variability

(1) Processing time at each stage is 1 minute.

(2) Processing time at Stage B is 1 minute and at stage A is uniformly distributed

[0.5, 1.5] 1 CT compared to Case 1?

(3) Processing time at Stage B is 1 minute and at stage A is uniformly distributed

[0.2, 1.8] 1 CT compared to Case 2?

Motivating Example: Impact of Variability

Motivating Example: Impact of Variability

 One way to address this loss of effective capacity is to introduce buffer

Dr. Wee Kwan Eng Slide 5 OPIM 201, SMU

Where the time goes

In a lifetime, the average American will spend --

SIX MONTHS Waiting at stop lights

TWO YEARS Unsuccessfully returning phone calls

FOUR YEARS Doing housework

SIX YEARS Eating

Dr. Wee Kwan Eng Slide 6 OPIM 201, SMU

Dr. Wee Kwan Eng Slide 7 OPIM 201, SMU

Dr. Wee Kwan Eng Slide 8 OPIM 201, SMU

Deterministic Arrival & Consultation Time

A More Realistic Service Process

Patient 1 Patient 3 Patient 5 Patient 7 Patient 9 Patient 11

avg. interarrival time: 5 2 min. 3 min. 4 min. 5 min. 6 min. 7 min.

Dr. Wee Kwan Eng Slide 10 OPIM 201, SMU

Variability Leads to Waiting Time

Dr. Wee Kwan Eng Slide 12 OPIM 201, SMU

Variability: Where Does It Come From?

Beau Ties Ltd – Call Center Problem

Dr. Wee Kwan Eng Slide 14 OPIM 201, SMU

Beau Ties Ltd – Call Center Problem

What should the staffing (capacity) plan be?

How To Measure Variability?

Dr. Wee Kwan Eng Slide 16 OPIM 201, SMU

A More Appropriate Measure of Variability …

 Coefficient of Variation (CV) =

 A relative measure of variability

 Recall that Days of Supply (or inventory turn = ) is a better

Dr. Wee Kwan Eng Slide 17 OPIM 201, SMU

Absolute versus Relative Variability

Dr. Wee Kwan Eng Slide 18 OPIM 201, SMU

Absolute versus Relative Variability (cont’d)

Dr. Wee Kwan Eng Slide 19 OPIM 201, SMU

Waiting Line Model a avg. interarrival time

Entry to system Begin Service Departure

Avg. waiting time in queue Tq Service time p

Avg. time in system (Flow Time) T=Tq+p

DECISION: Demand is given; but we have control over Supply (capacity)

Predicting Time in Queue Tq

Why the long queues for the women’s restroom?

 Women’s Restroom Equity Bill:

Dr. Wee Kwan Eng Slide 23 OPIM 201, SMU

Waiting Line Model in Call Center: Create a Staffing Plan

 Seasonality (predictable variation) vs. variability (unpredictable variation)

Case Study: Beau Ties Ltd – Staffing Plan

Time # of Customers Time # of Customers

Checking Your Understanding

Hence Beau Ties needs operators.

Beau Ties Ltd – Staffing Plan (cont’d)