BUSI70228

Operations
Jiankun Sun

Session 9
Introduction to Queueing Systems
Outline

- Fundamentals of queueing systems

- Capacity management in a queueing system

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How Much Time Do You Spend Queueing in Your Life?

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A Simple Service Process With One Queue

- Three basic elements: arrivals, service, waiting line

Order queue
“buffer” size K
Incoming Answered
calls Staff calls
Calls processing
on hold calls

Blocked calls Abandoned calls

(busy signal) (tired of waiting)

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Will There Be a Queue in This System?

Average arrival rate

Server
= 5 customers/hr
6 customers/hr

Case 1: Case 2:
Hour 1 2 3 4 Hour 1 2 3 4
Demand 5 5 5 5 Demand 3 3 7 7
Service 5 5 5 5 Service 3 3 6 6
Queue 0 Queue 1 2

Capacity cannot “run ahead” of demand.

(WSJ, Dec 20, 2017)

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Why Do Queues Form?

- Queues form due to mismatch between supply and demand.

- Predictable: expected demand > expected supply

• Seasonality/known fluctuations in demand, but constant system capacity
• Utilization ≥ 100%

- Unpredictable: variability
• Randomness in arrivals and service times, random availability of servers,
random routing in a process, etc.
• Queues build up even if utilization < 100%

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Example: Call Centre at Pine Valley Bank

- The Pine Valley Bank has a call centre that serves its customers.
- The management estimates that it takes a customer service
representative (CSR) 18 minutes on average to complete a call.
- There are on average 22.5 calls per hour.
- The call centre has 8 CSRs currently.

- Questions:
• Are the staff enough?
• What is the average waiting time of a customer?
• What is the probability that a customer waits for more than 1 minute?
• …

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Example: Call Centre at Pine Valley Bank

- Known facts
• Arrival rate = 22.5 calls/hr
• Service rate = 60/18 = 3.3 calls/hr/CSR

- Minimum number of CSRs = 22.5/3.3 = 6.8 à 7 CSRs

• Current staffing level of 8 CSRs exceeds the minimum requirement.

- Current performance (refer to the spreadsheet)

• Average customer waiting time = 0.148 hour = 8.9 minutes
• Probability of waiting for more than 1 minute = 54.17%
• Average utilization of servers = 85.23% (= 22.5/(3.3×8))

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The Drivers of Waiting

- Waiting time increases with

• Arrival rate
• Service time
• Variability in inter-arrival time and service time

Nonlinear relationship:
Waiting time blows up
as arrival rate keeps
increasing!

*Note: See appendix for math details.

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How to Reduce Queues to Improve Service Quality?

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Levers to Reduce Queues

- Increase service capacity

• Reduce length of service time
• Increase staffing or service stations

- Reduce seasonality and variability in arrivals

• Price discounts for off-peak hour service
• Appointment system

- Reduce the variability in service

• Standardize the service process
• Reduce the involvement of the customer at the scarce resource
whenever possible

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Reduce Fluctuations in Arrivals

GymFlow Changes Consumer Behavior

GymFlow Traffic (Jan 2013 to March 2013)

}
Before GymFlow (Jan 17, 2013) 2 Weeks After 2 Months after

Chart data adjusted for seasonality

23% reduction in
peak traffic

5:45 AM 6:45 AM 7:45 AM 8:45 AM 9:45 AM 10:45 AM 11:45 AM 12:45 PM 1:45 PM 2:45 PM 3:45 PM 4:45 PM 5:45 PM 6:45 PM 7:45 PM 8:45 PM 9:45 PM 10:45 PM 11:45 PM

© 2012-2013, GymFlow Inc.

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Outline

- Fundamentals of queueing systems

- Capacity management in a queueing system

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Which System Is “Better”?

- Suppose there are two small food services at an airport.

• System 1: Each food service serves its customer arrivals independently
• System 2: Combine the two services to serve the demand of both
services

- How do the waiting times compare in the two systems?

𝜆
𝜇 𝜇
2𝜆
𝜆
𝜇 𝜇

System 1 System 2

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Which System Is “Better”?

- Assume that arrival rate 𝜆 = 15 customers/hr and service rate 𝜇 =

20 customers/hr for each service if they operate independently.

- Performance comparison
• Utilization: 75% ( = 15/20) for both systems
• Average waiting time: 9 min in system 1 vs. 3.9 min in system 2

𝜆
𝜇 𝜇
2𝜆
𝜆
𝜇 𝜇

System 1 System 2

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Benefits of Capacity Pooling

- Queueing systems exhibit economies of scale.

- Capacity pooling can significantly improve the system efficiency.

• Larger systems have shorter waiting time at a given utilization level.
• Larger systems can achieve higher utilization while maintaining the same
responsiveness.

- There are decreasing returns to scale.

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Will You Run a Supermarket on a Single Queue?

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Concerns of Capacity Pooling

- Pooling benefits are lower when the systems that are pooled are
not truly independent.

- Pooling may require broader range of skills of the workforce.

- Customers may value being treated consistently by the same

person.

- Pooling may introduce additional setups.

- Pooling may backfire when it combines different customer classes.

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Summary

- Fundamentals of queueing systems

• Causes of queues
• Performance evaluation of a queueing system
• How to reduce queues: reduce variability, increase capacity

- Capacity management in a queueing system

• Capacity pooling: economies of scale

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*Appendix: The Drivers of Waiting

- The waiting time in line is (approximately)

p
Processing time Utilization 2(m+1) 1
CVa2 + CVp2
Tq = ( )⇥( )⇥( )
m 1 Utilization 2

• m = number of servers
• Utilization = flow rate/capacity = processing time/(m * inter-arrival time)
• CVa = standard deviation of inter-arrival time/average inter-arrival time
• CVp = standard deviation of processing time/average processing time

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