1. What is operation research?

Explain scope of operation

research. What are merits and demerits of operation research?

Operations research (OR) is an analytical method of problem-solving and decision-making that

is useful in the management of organizations. In operations research, problems are broken
down into basic components and then solved in defined steps by mathematical analysis.

The process of operations research can be broadly broken down into the following steps:

1. Identifying a problem that needs to be solved.

2. Constructing a model around the problem that resembles the real world and variables.
3. Using the model to derive solutions to the problem.
4. Testing each solution on the model and analyzing its success.
5. Implementing the solution to the actual problem.

Disciplines that are similar to, or overlap with, operations research include statistical analysis,
management science, game theory, optimization theory, artificial intelligence and network
analysis. All of these techniques have the goal of solving complex problems and improving
quantitative decisions.

The concept of operations research arose during World War II by military planners. After the
war, the techniques used in their operations research were applied to addressing problems in
business, the government and society.

Characteristics of Operations Research:-

There are three primary characteristics of all operations research efforts:

1. Optimization- The purpose of operations research is to achieve the best performance

under the given circumstances. Optimization also involves comparing and narrowing
down potential options.
2. Simulation- This involves building models or replications in order to try out and test
solutions before applying them.
3. Probability and statistics- This includes using mathematical algorithms and data to
uncover helpful insights and risks, make reliable predictions and test possible solutions.

Importance of Operations Research:-

The field of operations research provides a more powerful approach to decision making than
ordinary software and data analytics tools. Employing operations research professionals can
help companies achieve more complete datasets, consider all available options, predict all
possible outcomes and estimate risk. Additionally, operations research can be tailored to
specific business processes or use cases to determine which techniques are most appropriate
to solve the problem.
Uses of Operations Research:-

Operations research can be applied to a variety of use cases, including:

 Scheduling and time management.

 Urban and agricultural planning.
 Enterprise resource planning (ERP) and supply chain management (SCM).
 Inventory management.
 Network optimization and engineering.
 Packet routing optimization.
 Risk management.

Advantages of Operations Research:-

Enhanced Productivity

Operations research helps in improving the productivity of the organizations. Operations

controls provide significant information to the managers before making an important decision. It
helps in making small decisions for important decisions for an organization. Many organizations
make the use of simulation operations research methods to enhance their productivity by
applying different combinations.

It also helps in performing day-to-day tasks like inventory control, workforce planning, expansion
of the business, installation, and up-gradation of technology. Effective and accurate decision
making helps in improving the productivity of the organization.

Linear Programming

Management is responsible for making important decisions about the organization. Operations
research provides many alternatives for one problem, which helps the management to choose
the best decision and implement it to get a positive outcome.

Managers can evaluate the risks associated with each solution and can decide whether they
want to go with the solution or not.

Improved Coordination

Operations research improves the coordination between different departments and employees
of an organization. Because operations research focuses on the whole organization and does
not focus on one department.

As a result of that, managers of each department know what they should do to achieve a
common objective of the organization. Therefore, managers of different departments can
coordinate with one another better when solutions are applied to all the departments’ altogether.

Lower Risk of Failure

Operations research lowers the chances of failure as with the help of operations, and research
managers get to know about all the alternative solutions for a single problem.
All risks associated with a solution are analyzed before implementing it. As a result of which the
risk of failure reduces unless something unexpected event takes place.

Control On The System

Operations research helps in redefining the control of a system. Operations research provides
in-depth knowledge about a particular action, which allows managers to take better control of
the work. They can control their subordinates in a better way and can make the most relevant
job done on priority.

Disadvantages of Operations Research:-

Costly

The first and foremost disadvantage of operations research is its high cost. The operations
research works on mathematical equations that require expensive technology to create them. In
addition to this, experts are needed to perform simulations.

All of this might provide effective solutions but at a very high cost. Organizations with a small
budget can be adopted operations research because of its high cost of implementation.

Technology Dependent

Another limitation of operations research is its technology dependence. The mathematical

equations can only be analyzed on computers. Its reliance on technology makes it a non-
popular choice of managers.

Dependence On Experts

A team of experts is required to perform operations research. There are various factors
associated with this, which makes operations research an unpopular choice for management.

For example, the solutions will not be effective and can’t be implemented if there is a
communication gap between managers and OR experts. Besides this, all solutions will become
useless and might cause loss rather than benefit if the 3wrong information is shared with the
experts.

Unquantifiable Factors

The effectiveness of solutions developed using operations research largely depends on the
various factors. It is easy to measure quantifiable factors and use them for the operations
research, but the problem arises when important factors are in unquantifiable
form.Unquantifiable factors result in inaccurate solutions.

Difficult to Implement

The solutions obtained from operations research are difficult to implement, as most of them are
usually unrealistic. Some modifications are required to make to implement the solutions which
hamper the effectiveness of the solution.
 2.) Explain Vogel’s approximation problem. What is enumeration
method of linear programming? What is a transportation
problem?

Vogel’s Approximation Method (VAM) is one of the methods used to calculate the initial basic
feasible solution to a transportation problem. However, VAM is an iterative procedure such that
in each step, we should find the penalties for each available row and column by taking the least
cost and second least cost. In this article, you will learn how to find the initial basic feasible
solution to a transportation problem such that the total cost is minimized.

Vogel’s Approximation Method Steps

Below are the steps involved in Voge’s approximation method of finding the feasible solution to
a transportation problem.

Step 1: Identify the two lowest costs in each row and column of the given cost matrix and then
write the absolute row and column difference. These differences are called penalties.

Step 2: Identify the row or column with the maximum penalty and assign the corresponding
cell’s min (supply, demand). If two or more columns or rows have the same maximum penalty,
then we can choose one among them as per our convenience.

Step 3: If the assignment in the previous satisfies the supply at the origin, delete the
corresponding row. If it satisfies the demand at that destination, delete the corresponding
column.

Step 4: Stop the procedure if supply at each origin is 0, i.e., every supply is exhausted, and
demand at each destination is 0, i.e., every demand is satisfying. If not, repeat the above steps,
i.e., from step 1

An enumeration algorithm is an algorithm that enumerates the answers to a computational

problem. Formally, such an algorithm applies to problems that take an input and produce a list
of solutions, similarly to function problems. For each input, the enumeration algorithm must
produce the list of all solutions, without duplicates, and then halt. The performance of an
enumeration algorithm is measured in terms of the time required to produce the solutions, either
in terms of the total time required to produce all solutions, or in terms of the maximal delay
between two consecutive solutions and in terms of a preprocessing time, counted as the time
before outputting the first solution. This complexity can be expressed in terms of the size of the
input, the size of each individual output, or the total size of the set of all outputs, similarly to
what is done with output-sensitive algorithms.
Common Techniques :-

 Backtracking: The simplest way to enumerate all solutions is by systematically

exploring the space of possible results (partitioning it at each successive step).[2]
However, performing this may not give good guarantees on the delay, i.e., a
backtracking algorithm may spend a long time exploring parts of the space of possible
results that do not give rise to a full solution.

 Flashlight search: This technique improves on backtracking by exploring the space of

all possible solutions but solving at each step the problem of whether the current partial
solution can be extended to a partial solution.[1] If the answer is no, then the algorithm
can immediately backtrack and avoid wasting time, which makes it easier to show
guarantees on the delay between any two complete solutions. In particular, this
technique applies well to self-reducible problems.

 Closure under set operations: If we wish to enumerate the disjoint union of two sets,
then we can solve the problem by enumerating the first set and then the second set. If
the union is non disjoint but the sets can be enumerated in sorted order, then the
enumeration can be performed in parallel on both sets while eliminating duplicates on
the fly. If the union is not disjoint and both sets are not sorted then duplicates can be
eliminated at the expense of a higher memory usage, e.g., using a hash table. Likewise,
the Cartesian product of two sets can be enumerated efficiently by enumerating one set
and joining each result with all results obtained when enumerating the second step

Transportation Problem:-

The transportation problem is a special type of linear programming problem where the objective
consists in minimizing transportation cost of a given commodity from a number of sources or
origins (e.g. factory, manufacturing facility) to a number of destinations (e.g. warehouse,
store). Each source has a limited supply (i.e. maximum number of products that can be sent
from it) while each destination has a demand to be satisfied (i.e. minimum number of products
that need to be shipped to it). The cost of shipping from a source to a destination is directly
proportional to the number of units shipped.

Basic Notation:

 m = number of sources (i = 1 … m)
 n = number of destinations (j = 1 … n)
 c i,j = unit cost of shipping from source i to destination j
 x i,j = amount shipped from source i to destination j
 a i = supply at source i
 b j = demand at destination j
 Types of Transportation problem: =

There are two different types of transportation problems based on the initial given information:

 Balanced Transportation Problems: cases where the total supply is equal to the total
demand.
 Unbalanced Transportation Problems: cases where the total supply is not equal to the
total demand. When the supply is higher than the demand, a dummy destination is
introduced in the equation to make it equal to the supply (with shipping costs of $0); the
excess supply is assumed to go to inventory. On the other hand, when the demand is
higher than the supply, a dummy source is introduced in the equation to make it equal to
the demand (in these cases there is usually a penalty cost associated for not fulfilling the
demand).

In order to proceed with the solution of any given transportation problem, the first step consists
in verifying if it is balanced. If it is not, it must be balanced accordingly.

3.) What is PERT? Explain with real life examples. What is network
analysis and what are its objectives? Explain drawing of arrow
diagram.

The Program Evaluation Review Technique, or PERT, is a visual tool used in project planning.
Using the technique helps project planners identify start and end dates, as well as interim
required tasks and timelines. The information is displayed as a network in chart form.

PERT helps project planners identify:

 Start and end dates

 Anticipated total required completion time
 All activities, referred to as events on the chart, that impact the completion time
 The required sequence of events
 The probability of completion by a certain date

The PERT Process:-

PERT has a set series of steps in mapping out a complex project, which include:

1. List all the tasks and milestones (a.k.a. events) required for completion of the project
2. Determine the required sequence of tasks
3. Design a chart to visually display all the steps
4. Estimate the time required for each task
5. Identify the critical path – the longest series of tasks in the project
6. Adjust the chart to reflect progress made once the project starts
A PERT chart uses numbered circles or rectangles to represent milestones and straight lines
with arrows at the end to represent tasks to be completed. The direction of the arrows, and the
numbers, indicate the required sequence. Typically, the numbers increase by 10 at each
milestone, so that new tasks can be added along the way without requiring the whole chart to be
redrawn and numbered.

Example:-

Analysis of a coffee Shop that Uses PERT

Training coffee shop employees to work together as a team requires a strategy for teaching
smaller skills within the context of the larger operation. The "critical path method," called CPM,
is a system for project completion. It can help coffee shop employees understand the mandatory
steps in making coffee drinks and filling customer orders. The "project evaluation and review
technique," known as PERT, has elements in common with CPM, and allows for adjustment to
project completion steps.

PERT Development:-

The critical path method is a means of determining a given project's essential steps to
ensure timely completion. In a CPM model, delays in meeting benchmarks along a
project's critical path also cause delays in completing the project as a whole. The project
evaluation and review technique is a method of determining the time needed to complete
project steps. PERT uses multiple completion times to create several scenarios a team
can use in determining the best course of action. Over time, these two methods of
project completion have merged into a single technique known as PERT-CPM.
Together, these techniques allow a project team to create a diagram showing points or
nodes along a project's critical path and the objectives needed to satisfy each node.

Coffee Shop Operation:-

The often fast-paced environment of a modern coffee shop requires employees to

complete tasks, including making drinks and completing sales, in short amounts of time.
A coffee shop using the PERT-CPM method can train employees to follow specific steps
along critical paths to complete customer orders quickly with little wasted time. This can
include assigning specific customer service tasks to each employee over a given shift.
For example, one employee focuses on taking customer orders while another employee
focuses solely on making coffee drinks. The division of labor allows for overall faster
delivery of customer orders.

Performing Specific Tasks:-

Training coffee shop employees to perform specific tasks within assigned roles is
integral for the PERT-CPM method of project completion to work for the small business.
For example, training employees to make espresso drinks that satisfy various customer
orders requires education in proper tamping technique, obtaining the correct grind for
espresso beans, correct pulling times for liquid espresso, proper milk temperatures, and
wand techniques. A coffee shop using the PERT method creates a diagram showing the
nodes along the steps to making basic espresso drinks, while detailing the variables
employees use when making special customer orders.
 Relationship of Activities:-

All project steps within the PERT method interrelate, in that the team works on individual
benchmarks to achieve common goals. In a coffee shop using this method, employees
work together within individual assigned roles to complete larger tasks. No single
employee is responsible for the completion of entire customer orders. This
compartmentalized focus allows employees to place every effort into completing each
step along the critical paths of every customer order. Employees also understand the
order of events needed to complete orders in a timely fashion. For example, employees
working at the espresso bar understand they can't begin to make drinks until customer
service employees clearly communicate orders.

Arrow Diagram:-

An arrow diagram is defined as a process diagramming tool used to determine optimal

sequence of events, and their interconnectivity. It is used for scheduling and to
determine the critical path through nodes. The arrow diagramming method shows the
required order of tasks in a project or process, the best schedule for the entire project,
and potential scheduling and resource problems and their solutions. The arrow diagram
lets you calculate the "critical path" of the project—the flow of critical steps where delays
can affect the timing of the entire project and where addition of resources can speed up
the project.

When To Use Arrow Diagram:-

 When scheduling and monitoring tasks within a complex project or process with
interrelated tasks and resources
 When you know the steps of the project or process, their sequence, and how long each
step takes
 When project schedule is critical, with serious consequences for completing the project
late or significant advantage to completing the project early

Arrow Diagram Procedure:-

Materials needed: Sticky notes or cards, marking pens, and large writing surface (newsprint or
flipchart pages).

Drawing the Network

1. List all the necessary tasks in the project or process. One method is to write each task
on the top half of a card or sticky note. Across the middle of the card, draw a horizontal
arrow pointing right.
2. Determine the correct sequence of the tasks. Do this by asking three questions for each
task:
o Which tasks must happen before this one can begin?
o Which tasks can be done at the same time as this one?
o Which tasks should happen immediately after this one?
we should Create a table with four columns: prior tasks, this task, simultaneous
tasks, following tasks for ease of use.

3. Diagram the network of tasks. If you are using notes or cards, arrange them in sequence
on a large piece of paper. Time should flow from left to right and concurrent tasks should
be vertically aligned. Leave space between the cards.

4. Between each two tasks, draw circles for "events." An event marks the beginning or end
of a task and can help visually separate tasks.

5. Look for the three common problem situations below and redraw them using "dummies"
(not real tasks) or extra events. A dummy is an arrow drawn with dotted lines used to
separate tasks that would otherwise start and stop with the same events or to show
logical sequence.

o Two simultaneous tasks start and end at the same events.

 Solution: Use a dummy and an extra event to separate them. In Figure
1, event 2 and the dummy between 2 and 3 have been added to separate
tasks A and B.
o Task C cannot start until both tasks A and B are complete; a fourth task, D,
cannot start until A is complete, but need not wait for B. (See Figure 2.)
 Solution: Use a dummy between the end of task A and the beginning of
task C.
o A second task can be started before part of a first task is done.
 Solution: Add an extra event where the second task can begin and use
multiple arrows to break the first task into two subtasks. In Figure 3, event
2 was added, splitting task A.

Dummy separating simultaneous tasks

 Dummy keeping sequence correct

Using an extra event

6. When the network is correct, label all events in sequence with event numbers in the
circles. It may be helpful to label all tasks in sequence, using letters.

4.) Explain Games theory and its pure strategy with help of an
example. Explain expected money value criterion.
Game Theory

Game theory is an approach to modelling behavior in situations where the

outcome of your decisions depends on the decisions of others.

Game theory is the study of strategic, interactive decision making among rational
individuals or organizations.

Game theory is a branch of applied mathematics that provides tools for analyzing
situations in which parties (called players) make decisions that are interdependent.
This interdependence causes each player to consider the other player’s possible
decisions (or strategies) in formulating strategy.

In addition, a player need not be an individual; it may be a nation, a corporation,

or a team comprising many people with shared interests.
A solution to a game describes the optimal decisions of the players, who may
have similar, opposed, or mixed interests, and the outcomes that may result from these
decisions.

Game theory is applied for determining different strategies in the business world.
It offers valuable tools for solving strategy problems

A pure strategy is a term used to refer to strategies in Game theory. Each player is given a set
of strategies, if a player chooses to take one action with probability 1 then that player is playing
a pure strategy.
For example, in the game of Rock-Paper-Scissors, if a player would choose to only play
scissors for each and every independent trial, regardless of the other player's strategy, choosing
scissors would be the player's pure strategy.

In a pure strategy a player chooses an action for sure, whereas in a mixed strategy, he
chooses a probability distribution over the set of actions available to him.

EMV Criterion

The decision made and the final state of nature (which the decision maker does not know
beforehand) determines the payoff. Under this EMV criterion, the decision maker calculates the
expected value of the payoff for each alternative, and then she chooses the decision that has
the maximum weighted average.

The EMV is how much money you can expect to make from a certain decision. For example, if
you bet $100 that card chosen from a standard deck is a heart, you have a 1 in 4 chance of
winning $100 (getting a heart) and a 3 in 4 chance of losing $100 (getting any other suit). This
gives you an EMV of -$50:
$100 * 1/4 = $25
-$100 * 3/4 = (-$75)
= $25 + -$75 = -$50

As the expected monetary value is based on probability, there’s no quick and easy formula.
Calculating the Expected Monetary Value becomes more complicated when you have more
complex situations. This is where a tree diagram comes in handy.

EMV Example:-

Let’s say someone is taking a business to court, with the hopes of getting a large settlement.
The EMV can give a realistic view of what the likely financial outcome is of a court case. The
following is based on an infographic below:-
In the above image, the EMV for no settlement is $64,000. This figure is obtained through the
following steps:

1. Calculate the Summary Judgement denied.

1. Start on the far right of the Summary Judgement Denied branch, where a verdict
for the Plaintiff results in a 10% chance of getting $200,000, a 80% chance of
getting $300,000 and a 10% chance of getting $500,000:
(.1 * $200,000) + (.8 * $300,000) + (.1 * $500,000) =
$20,000 + $240,000 + $50,000 = $310,000

2. Multiply the answer by 50%, which is the odds the verdict will be for the plaintiff.
.5 * $310,000 = $155,000

3. Move up to the Defendant’s verdict. The odds of this happening is 50%, so:
.5 * $120,000 = $60,000

4. Add up both EMVs to get the total:

$155,000 + $60,000 = $215,000

5. Summary judgement denied has a .4 chance of happening, so:

.4 * $215,000 = $86,000
 2. Calculate the Summary Judgement granted. The odds of summary judgement
granted is 60%, so:
.6 * $30,000 = $18,000
3. Add both EMVs to get the total Expected Monetary Value for the case: $86,000 +
$18,000 = $104,000

The expected value for no settlement is $104,000, giving lawyers (and the plaintiff) a good place
to start settlement negotiations.

5.) Explain M/M/1 model of queuing. What do you mean by FIFO?

What is queuing theory?
In queueing theory, a discipline within the mathematical theory of probability, an M/M/1 queue
represents the queue length in a system having a single server, where arrivals are determined
by a Poisson process and job service times have an exponential distribution. The model name
is written in Kendall's notation. The model is the most elementary of queueing models[1] and an
attractive object of study as closed-form expressions can be obtained for many metrics of
interest in this model. An extension of this model with more than one server is the M/M/c queue.

An M/M/1 queue is a stochastic process whose state space is the set {0,1,2,3,...} where the
value corresponds to the number of customers in the system, including any currently in service.

 Arrivals occur at rate λ according to a Poisson process and move the process from state
i to i + 1.
 Service times have an exponential distribution with rate parameter μ in the M/M/1 queue,
where 1/μ is the mean service time.
 All arrival times and services times are (usually) assumed to be independent of one
another.[2]
 A single server serves customers one at a time from the front of the queue, according to
a first-come, first-served discipline. When the service is complete the customer leaves
the queue and the number of customers in the system reduces by one.
 The buffer is of infinite size, so there is no limit on the number of customers it can
contain.

The model can be described as a continuous time Markov chain with transition rate matrix

on the state space {0,1,2,3,...}. This is the same continuous time Markov chain as in a birth–
death process.

The M/M/1 queuing model is a queuing model where the arrivals follow a Poisson process,
service times are exponentially distributed and there is one server.

The assumption of M/M/1 queuing model are as follows:

1. The number of customers arriving in a time interval t follows a Poisson Process with
parameter λ.
 2. The interval between any two successive arrivals is exponentially distributed with
parameter λ.
3. The time taken to complete a single service is exponentially distributed with parameter μ.
4. The number of server is one.
5. Although not explicitly stated both the population and the queue size can be infinity.
6. The order of service is assumed to be FIFO.

FIFO:-

The FIFO method is used for cost flow assumption purposes. In manufacturing, as items
progress to later development stages and as finished inventory items are sold, the associated
costs with that product must be recognized as an expense.

Under FIFO, it is assumed that the cost of inventory purchased first will be recognized first. The
dollar value of total inventory decreases in this process because inventory has been removed
from the company’s ownership. The costs associated with the inventory may be calculated in
several ways—one being the FIFO method.

Typical economic situations involve inflationary markets and rising prices. In this situation, if
FIFO assigns the oldest costs to the cost of goods sold, these oldest costs will theoretically be
priced lower than the most recent inventory purchased at current inflated prices.

This lower expense results in higher net income. Also, because the newest inventory was
purchased at generally higher prices, the ending inventory balance is inflated.

Example of FIFO:-

Inventory is assigned costs as items are prepared for sale. This may occur through the
purchase of the inventory or production costs, the purchase of materials, and the utilization of
labor. These assigned costs are based on the order in which the product was used, and for
FIFO, it is based on what arrived first.

Imagine if a company purchased 100 items for $10 each, then later purchased 100 more items
for $15 each. Then, the company sold 60 items. Under the FIFO method, the cost of goods sold
for each of the 60 items is $10/unit because the first goods purchased are the first goods sold.
Of the 140 remaining items in inventory, the value of 40 items is $10/unit and the value of 100
items is $15/unit. This is because inventory is assigned the most recent cost under the FIFO
method.

With this remaining inventory of 140 units, let's say the company sells an additional 50 items.
The cost of goods sold for 40 of these items is $10, and the entire first order of 100 units has
been fully sold. The other 10 units that are sold have a cost of $15 each, and the remaining 90
units in inventory are valued at $15 each (the most recent price paid).

The FIFO method follows the logic that to avoid obsolescence, a company would sell the oldest
inventory items first and maintain the newest items in inventory. Although the actual inventory
valuation method used does not need to follow the actual flow of inventory through a company,
an entity must be able to support why it selected the use of a particular inventory valuation
method.

Queuing Theory:-
Queuing theory is used to identify and correct points of congestion in a process. The queue may
consist of people, things, or information. In any case, they are being forced to wait for service.
That is inefficient, bad for business, and annoying (when the queue consists of people).

Queuing theory is used to analyze the existing process and map out alternatives with a better
result.

Queuing theory is a branch of mathematics that studies how lines form, how they function, and
why they malfunction. Queuing theory examines every component of waiting in line, including
the arrival process, service process, number of servers, number of system places, and the
number of customers—which might be people, data packets, cars, or anything else.

Real-life applications of queuing theory cover a wide range of businesses. Its findings may be
used to provide faster customer service, increase traffic flow, improve order shipments from a
warehouse, or design data networks and call centers.

As a branch of operations research, queuing theory can help inform business decisions on how
to build more efficient and cost-effective workflow systems.

Queues can occur whenever resources are limited. Some queuing is tolerable in any business
since a total absence of a queue would suggest a costly overcapacity.

Queuing theory aims to design balanced systems that serve customers quickly and efficiently
but do not cost too much to be sustainable.

At its most basic level, queuing theory involves an analysis of arrivals at a facility, such as a
bank or a fast-food restaurant, and an analysis of the processes currently in place to serve
them. The end result is a set of conclusions that aim to identify any flaws in the system and
suggest how they can be ameliorated.

The origin of queuing theory can be traced to the early 1900s in a study of the Copenhagen
telephone exchange by Agner Krarup Erlang, a Danish engineer, statistician, and
mathematician. His work led to the Erlang theory of efficient networks and the field of telephone
network analysis.

To this day, the fundamental unit of telecommunications traffic in voice systems is called an
"erlang.”

Benefits of Queuing theory:-

Queuing theory as an operations management technique is commonly used to determine and

streamline staffing needs, scheduling, and inventory in order to improve overall customer
service. It is often used by Six Sigma practitioners to improve processes.
The Psychology of Queuing theory:-

The psychology of queuing is related to queuing theory. This is the component of queuing that
deals with the natural irritation felt by many people who are forced to queue for service, whether
they're waiting to check out at the supermarket or waiting for a website to load.

A call-back option while waiting to speak to a customer representative by phone is one example
of a solution to customer impatience. A more old-fashioned example is the system used by many
delis, which issue customer service numbers to allow people to track their progress to the front of
the queue.

Example of Queuing Theory:-

A paper by Stanford Graduate School of Business Professor Lawrence Wein et al. used queuing
theory to analyze a variety of possible emergency responses to an airborne bioterrorism attack in
a public place. The model pointed to specific actions that could be taken to reduce the wait time
for emergency care, thus decreasing the potential number of deaths.

Queuing theory is useful, if not quite so urgent, in guiding the logistics of many businesses. The
operations department for a delivery company, for example, is likely to use queuing theory to
help it smooth out the kinks in its systems for moving packages from a warehouse to a customer.
In this case, the "line" being studied is comprised of boxes of goods waiting to be delivered to
customers.

By applying queuing theory, a business can develop more efficient systems, processes, pricing
mechanisms, staffing solutions, and arrival management strategies to reduce customer wait times
and increase the number of customers that can be served.