Queuing: Waiting-Line Models

Problem 1:
A new shopping mall is considering setting up an information desk manned by one employee.
Based upon information obtained from similar information desks, it is believed that people will
arrive at the desk at a rate of 20 per hour. It takes an average of 2 minutes to answer a question. It is
assumed that the arrivals follow a Poisson distribution and answer times are exponentially
distributed.
(a) Find the probability that the employee is idle.
(b) Find the proportion of the time that the employee is busy.
(c) Find the average number of people receiving and waiting to receive some information.
(d) Find the average number of people waiting in line to get some information.
(e) Find the average time a person seeking information spends in the system.
(f) Find the expected time a person spends just waiting in line to have a question answered (time
in the queue).
Problem 2:
Assume that the information desk employee in Problem 1 earns $10 per hour. The cost of waiting
time, in terms of customer unhappiness with the mall, is $12 per hour of time spent waiting in line.
Find the total expected costs over an 8-hour day.
Problem 3:
The shopping mall has decided to investigate the use of two employees on the information desk.
(a) Find the probability of no people in the system.
(b) Find the average number of people waiting in this system.
(c) Find the expected time a person spends waiting in this system.
(d) Assuming the same salary level and waiting costs as in Problem 2, find the total expected costs
over an 8-hour day.

Problem 4:
Three students arrive per minute at a coffee machine that dispenses exactly four cups per minute at
a constant rate. Describe the system parameters.
Problem 5:
A repairman at a local metal working shop services their five drill presses. Service time averages 10
minutes and is exponentially distributed. Machines breakdown after an average of 70 minutes
operation (following a Poisson distribution). Describe the major system characteristics.

ANSWERS
Problem 1:

(a)

(b)

(c)

P0 1

20
1
0.33 33%

30

0.66

Ls

20

2 people
30 20

2
202
Lq

1.33 people
( ) 30(30 20)
(d)

(e)

(f)

Ws

1
1

0.10 hours
30 20

Wq

20

0.0667 hours
( ) 30(30 20)

Problem 2:
From the solution to Problem 1:
The average person waits 0.0667 hours and there are 160(20 arrivals * 8 hours) arrivals per day.
Therefore: Total waiting time = 160 x 0.0667 = 10.67 hours
Total cost for waiting = Total waiting time * Cost per hour = 10.67 * $12 = $128 per day.
Salary cost = 8 hours * $10 = $80
Total cost = Salary cost + Waiting cost = $80 + $128 = $208 per day.

Problem 3:

20 per hour 30 per hour M 2 open channels (servers)

(a)
P0

1
0

1 20
1 20

1 20

0! 30
1!
30

2 30

2(30)
2(30) 20

1
2 1 4
60
1

3 2 9 60 20

1
1
50%
2 1 2
1
3 3

(b)

20

30
(1)[(2)(30) 20]2

(20)(30)

Ls

20
1

30
2

800
3 1 2

1600 2 3

1 8
0.75 people
12 12

(c)

Ws

Ls 0.75

0.0375 hours

20

Problem 4:

Lq

2
1.125
2 ( )
people in the queue on average

Wq

0.375
2 ( )
minutes in the queue waiting

Ls Lq

1.87

people in the system

Ws Wq

1
0.625

minutes in the system

Problem 5:
N=5
T = 10 minutes
U = 70 minutes
M = 1 server
X

T
10

0.125
T U 10 70

From Table D.8: where X = .125 and number of service channels = 1, D = 0.473, F = 0.920
Average number waiting = L = N(1 F) = 5(1 0.920) = 0.4
Average number of machines running = J = NF(1 X) = 5(0.920)(1 0.125) = 4.025 machines
Average number of machines being serviced = H = FNX = (0.920)(5)(0.125) = 0.575 machines
Probability of no wait = 1 D = 1 0.473 = 0.527

Capacity Planning
Problem 1:
The design capacity for engine repair in our company is 80 trucks/day. The effective capacity is 40
engines/day and the actual output is 36 engines/day. Calculate the utilization and efficiency of the
operation. If the efficiency for next month is expected to be 82%, what is the expected output?
Problem 2:
Given: F fixed cost $1000

V variable cost $2 / unit

P selling price $4 / unit

Find the break-even point in $ and in units.

Problem 3:
Develop the break-even chart for Problem 2.
Problem 4:
Jacks Grocery is manufacturing a store brand item that has a variable cost of $0.75 per unit and a
selling price of $1.25 per unit. Fixed costs are $12,000. Current volume is 50,000 units. The
Grocery can substantially improve the product quality by adding a new piece of equipment at an
additional fixed cost of $5,000. Variable cost would increase to $1.00, but their volume should
increase to 70,000 units due to the higher quality product. Should the company buy the new
equipment?
Problem 5:
What are the break-even points ($ and units) for the two processes considered in Problem 4?
Problem 6:
Develop a break-even chart for Problem 4.
Problem 7:
Good News! You are going to receive $6,000 in each of the next 5 years for sale of used machinery.
A bank is willing to lend you the present value of the money in the meantime at discount of 10%
per year. How much cash do you receive now?
7

ANSWERS:
Problem 1:
Utilization =

Actual output
36

45%
Design capacity 80

Efficiency =

Actual output
36

90%
Effective capacity 40

Expected Output (Effective capacity) (Efficiency)

(40)(0.82) 32.8 engines/day

Problem 2:

Break-even point($) BEP($)

Break-even point( x) BEP ( x )

F
1000 1000

$2, 000
V
2
0.5
11P
4
F
1000

500
P-V 4 2

Problem 3:

Problem 4:
Profit = TR TC
Option A: Stay as is:
Profit 50, 000*(1.25 .75) 12, 000 $13, 000.

Option B: Add equipment:

Profit 70, 000 *(1.25 1.00) 17, 000 $500.

Therefore the company should continue as is with the present equipment as this returns a higher
profit..
Problem 5:
Using current equipment:
BEP($)

BEP ( x )

F
12, 000 12, 000 12, 000

$30, 000
V
0.75 1 0.60
0.40
1
1
P
1.25
F
12, 000

24, 000
P V 1.25 0.75

Using the new equipment

BEP($)

BEP( x)

F
17, 000 17, 000 17, 000

$85, 000.
V
1.00 1 .80
0.2
1
1
P
1.25
F
17,000
17,000

68,000.
P V 125
. 100
.
0.25

Problem 6:

Problem 7:
The net present value factor for 10% and 5 years is 3.79
(3.79 0.909 0.826 0.751 0.683 0.621)
Therefore, the present value is: 3.79 * $6,000 $22,740
The Bad News is you do have to pay back the loans!

10

Human Resources and Job Design

Problem 1:
Develop a Process Chart for making a grilled cheese sandwich.
Problem 2:
Develop an Activity Chart for doing three loads of laundry.
Problem 3:
Develop a Process Chart for changing the oil in an automobile.
Problem 4:
Develop an Activity Chart for writing a term paper.

11

ANSWERS
Problem 1:
One possible solution. The level of detail in process charts depends upon the requirements of the
job. Time is often included to aid analysis of value added.
Process Chart
Distance

Symbol

Process Description

10

Move to cabinet

Get loaf of bread

Move to counter

Open loaf of bread

Remove two slices of bread

Lay slices on counter-top

Close loaf of bread

Move to cabinet
Replace loaf of bread on shelf

10

Move to refrigerator
Get mustard, package of ham
from refrigerator, and butter

10

Move to counter

Open package of ham

Remove two slices of ham

Close package of ham

Open mustard

Spread mustard on bread

Close mustard

12

Place ham on bread

Close sandwich

Open butter

Spread butter on top slice of

bread

Move to stove

Get fry pan

Turn heat on under fry pan

Wait for pan to heat

Move to counter

Get sandwich & butter

Move to stove

Place sandwich, buttered-side

down in pan

Butter top slice

Close butter

Move to counter

Pick up ham, mustard, and

butter

10

Move to refrigerator

Return butter, mustard, and

ham to refrigerator

Move to stove

Wait for sandwich to brown on

bottom

Inspect

Flip sandwich

13

Wait for sandwich to brown on

bottom

Inspect sandwich

10

Move to serving area

Serve sandwich

14

Problem 2:
Time

Operator

Machine
1

Machine
2

Washer

Dryer

Load
Being
clothes and loaded
detergent
in to
Machine 1

Idle

Idle

Run

Idle

Remove
clothes
from
Machine 1

Being
unloaded

Idle

Load
clothes
into
Machine 2

Idle

Being
loaded

Load
Being
clothes and loaded
detergent
into
Machine 1

Run

Idle

Run

Run

Remove
clothes
from
Machine 2

Idle

Being
unloaded

Hang
clothes

Idle

Idle

Problem 3:
One solution might be:
Process Chart for
Changing Oil in Car
Distance

Symbol

Check that needed filter is in

stock

Check that oil is in stock

15

30

Move to car
Get into car

Start engine

Idle car to warm engine

Drive car onto lift

Stop engine
Release hood catch

Get out of car

10

Go to lift control
Raise lift

10

Go to toolbox
Get wrench
Get container for drained oil
Get rag

10

Walk under lift

Wipe around oil drain plug

Loosen oil drain plug

Position container

Remove oil drain plug

Drain oil

Wipe around oil drain plug

Replace oil drain plug

Tighten oil drain plug

20

Remove container to disposal

area

16

15

Move to lift control

Lower lift
Wipe oil from wrench

Move to toolbox
Return wrench to tool chest
Get oil filter wrench from tool
chest
Get container for drained oil

10

Move to car engine area

Raise hood
Find oil filter

Loosen oil filter

Position container
Remove oil filter

20

Take old filter and container of

drained oil to disposal area

25

Move to filter stock area

Get new filter

25

Move to car engine area

Wipe around filter mount oil

seal

Install new filter

Tighten new filter

Remove oil filler cap

40

Move to oil stock

Get oil from stock
Move to car engine
compartment

17

Open oil container; pour in oil

filler
Replace oil filler cap
Clean hands
Start engine
Idle engine
Stop engine
Check oil level
Check oil filter seal
Check oil drain plug
Wipe up any spilled oil
Take empty oil containers to
disposal area
Wipe oil from oil filter wrench

25

Return oil filter wrench to tool

chest
Start engine
Drive car off lift
Park car for owner pickup
Return keys

18

Problem 4:

Activity Chart for Writing Term Paper

Time

Operator

Computer
1

Computer
2

Desktop

Library

Develop topic

Used for
word
processing

Develop initial
outline

Used for
word
processing

Research

Flesh out
outline with
information
from research

Used for
look-up
and web
search
Used for
word
processing

Evaluate paper
Final edit paper Used for
word
processing
Proof read
paper

Used for
word
processing

Print final copy Used for

of paper
printing

Does this Activity Chart contain enough detail that you could estimate the time it would take to
write the term paper?

Aggregate Planning
Problem 1:
Set the following problem up in transportation format and solve for the minimum cost plan.

19

Period
Feb

Mar

Apr

55

70

75

Regular

50

50

50

Overtime

Subcontract

12

12

10

Beginning Inventory

10

Demand

Capacity

Costs
Regular time

$60 per unit

Overtime

$80 per unit

Subcontract

$90 per unit

Inventory carrying cost

$1 per unit per month

Back order cost

$3 per unit per month

ANSWERS
Problem 1:

20

Location Strategies
Problem 1:

21

A major drug store chain wishes to build a new warehouse to serve the whole Midwest. At the
moment, it is looking at three possible locations. The factors, weights, and ratings being considered
are given below:
Ratings
Factor

Weights

Peoria

Des Moines

Chicago

Nearness to markets

20

Labor cost

Taxes

15

Nearness to suppliers

10

10

10

Which city should they choose?

Problem 2:
Balfours is considering building a plant in one of three possible locations. They have estimated the
following parameters for each location:
Location

Fixed Cost

Variable Cost

Waco, Texas

$300,000

$5.75

Tijuana, Mexico

$800,000

$2.75

Fayetteville, Arkansas

$100,000

$8.00

For what unit sales volume should they choose each location?
Problem 3:
Our main distribution center in Phoenix, AZ is due to be replaced with a much larger, more modern
facility that can handle the tremendous needs that have developed with the citys growth. Fresh
produce travels to the seven store locations several times a day making site selection critical for
efficient distribution. Using the data in the following table, determine the map coordinates for the
proposed new distribution center.

22

Store Locations

Map Coordinates (x,y)

Truck Round Trips per Day

Mesa

(10,5)

Glendale

(3,8)

Camelback

(4,7)

Scottsdale

(15,10)

Apache Junction

(13,3)

Sun City

(1,12)

Pima

(5,5)

10

23

Problem 4:
A company is planning on expanding and building a new plant in one of three countries in Middle
or Eastern Europe. The general manager, Patricia Donegal, has decided to base her decision on six
critical success factors: technology availability and support, availability and quality of public
education, legal and regulatory aspects, social and cultural aspects, economic factors, and political
stability.
Using a rating system of 1 (least desirable) to 5 (most desirable) she has arrived at the following
ratings (you may, of course, have different opinions). In which country should the plant be built?
Critical Success Factor

Turkey

Serbia

Slovakia

Technology availability and support

Availability and quality of public education

Legal and regulatory aspects

Social and cultural aspects

Economic factors

Political stability

Problem 5:
Assume that Patricia decides to use the following weights for the critical success factors:
Technology availability and support

0.3

Availability and quality of public education

0.2

Legal and regulatory aspects

0.1

Social and cultural aspects

0.1

Economic factors

0.1

Political stability

0.2

Would this change her decision?

24

Problem 6:
Patricias advisors have suggested that Turkey and Slovakia might be better differentiated by either
(a) doubling the number of critical success factors, or (b) breaking down each of the existing
critical success factors into smaller, more narrowly defined items, e.g., Availability and quality of
public education might be broken into primary, secondary, and post-secondary education. How
would you advise Ms. Donegal?

25

ANSWERS:
Problem 1:
Ratings

Weighted Ratings

Weights

Peoria

Des
Moines

Chicago

Peoria

Des
Moines

Chicago

Nearness to
markets

20

80

140

100

Labor cost

40

40

20

Taxes

15

120

135

105

Nearness to
suppliers

10

10

10

100

60

100

Sum of Weighted ratings:

340

375

325

Factor

Therefore, it appears that based upon the weights and rating, Des Moines should be chosen.

26

Problem 2:
Transition between Waco and Tijuana:
300, 000 (5.75 x) 800, 000 (2.75 x)
3 x 500, 000
x 166, 000

Transition between Waco and Fayetteville:

300, 000 (5.75 x ) 100, 000 (8.00 x)
200, 000 2.25 x
88,888 x

27

Problem 3:
New Distribution Center should be located at:

Cx

(10*3) (3*3) (4* 2) (15* 6) (13*5) (1*3) (5*10) 255

7.97
3 3 2 6 5 3 10
32

Cy

(5*3) (8*3) (7 * 2) (10* 6) (3*5) (12 *3) (5*10) 214

6.69
3 3 2 6 5 3 10
32

28

Problem 4:
Critical Success Factor

Turkey

Serbia

Slovaki
a

Technology availability and support

Availability and quality of public education

Legal and regulatory aspects

Social and cultural aspects

Economic factors

Political stability

23

19

22

Based upon her ratings of the critical success factors, Patricia should choose Turkey. From a
practical perspective, given the small difference between the scores for Turkey and Slovakia, and
the subjectivity of the ratings themselves, Patricia would be better advised to develop additional
critical success factors, more carefully weigh the individual factors; or, in general, to acquire more
information before making her decisions.

29

Problem 5:
Critical Success Factor

Wgt

Turkey

Serbia

Technology availability and support

0.3

1.2

0.9

1.2

Availability and quality of public

education

0.2

0.8

0.8

0.6

Legal and regulatory aspects

0.1

0.2

0.4

.5

Social and cultural aspects

0.1

0.5

0.3

0.4

Economic factors

0.1

0.4

0.3

0.3

Political stability

0.2

0.8

0.4

0.6

= 3.9

Slovaki
a

3.1

3.6

No, in this case, use of the weighting factors does not change the recommendation. One might
again suggest that additional information be considered in making the decision.
Problem 6:
(a) Doubling the number of critical success factors. There are two issues here. First, from a
practical perspective there are a limited number of truly critical success factors and these
should be the ones presently being considered. Any additional factors should be of secondary
or tertiary importance. Second, given the subjective nature of the rating process, adding
additional factors would also increase the overall margin of error of the final ratings to a degree
that may eliminate any gain in differentiation arising from the use of the additional factors. The
use of a maximum of seven to nine critical success factors is usually appropriate.
(b) Given that ones ability to estimate or rate an aggregate is usually better than ones ability to
estimate or rate the individual components of the aggregate, this approach is unlikely to
provide much help.

Layout Strategy

30

Problem 1:
As in most kitchens, the baking ovens in Loris Kitchen in New Orleans are located in one area
near the cooking burners. The refrigerators are located next to each other as are the dishwashing
facilities. A work area of tabletops is set aside for cutting, mixing, dough rolling, and assembling of
final servings, although different table areas may be reserved for each of these functions.
Given the following Interdepartmental Activity Matrix, develop an appropriate layout for Loris
Kitchen.
Interdepartmental Activity Matrix

Cooking burners (A)

Cooking
Burners (A)

Refrigerators (B)

Dishwashing (C)

Work Area (D)

193

12

82

222

Refrigerator (B)
Dishwashing (C)
Work Area (D)

The present layout is:

A

with a distance of 10 feet between adjacent areas.

31

Computing the Load * Distance measure:

Load * Distance
A to B

7 * 10

A to C

193*20

A to D

12*30

B to C

4*10

B to D

82*20

C to D

222*10

Total

70
3860
360
40
1640
2220
8190

Develop a preferred layout. What is the sum of the loads * distance of your new layout?

32

Problem 2:
A firm must produce 40 units/day during an 8-hour workday. Tasks, times, and predecessor
activities are given below.
Task

Time (Minutes)

Predecessor(s)

10

D, E

Total

38 minutes

Determine the cycle time and the appropriate number of workstations to produce the 40 units per
day.

33

ANSWERS
Problem 1:
From the Activity Matrix, C and D should be next to each other and A should be next to C. The
other relationships are minor by comparison. One possible solution is:
B

with a distance of 10 feet between adjacent areas.

Computing the Load * Distance measure:
Load * Distance
A to B

7 * 10

70

A to C

193*10

1930

A to D

12*20

240

B to C

4*20

80

B to D

82*30

2460

C to D

222*10

2220
7000

Total

Further improvement is possible. Try analyzing the following layouts.

A

Problem 2:

Cycle time

Production time available 8 hrs *60 minutes/hr 480

12 minutes/cycle
Units required
40 units
40

34

Minimum number of workstations

Cycle time

Work time required

Cycle time

38 minutes
3.17 station
12 minutes/cycle

3.17 workstations must be rounded up to 4 as 3 workstations would not be able to produce the
required output.
One layout not necessarily optimal

35