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Capacity Planning and Queuing Models: BY Group 2

This document discusses capacity planning and queuing models. It begins by defining capacity planning as determining the types and amounts of resources needed to implement a strategic business plan. It then discusses analytical queuing models using notations like M/M/1 and M/M/c to model different queue configurations. These models can be used to calculate performance measures like average waiting time and evaluate capacity planning alternatives. The document emphasizes that capacity planning is important for service firms to balance costs and customer wait times.

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Chawsu Hlaing
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59 views20 pages

Capacity Planning and Queuing Models: BY Group 2

This document discusses capacity planning and queuing models. It begins by defining capacity planning as determining the types and amounts of resources needed to implement a strategic business plan. It then discusses analytical queuing models using notations like M/M/1 and M/M/c to model different queue configurations. These models can be used to calculate performance measures like average waiting time and evaluate capacity planning alternatives. The document emphasizes that capacity planning is important for service firms to balance costs and customer wait times.

Uploaded by

Chawsu Hlaing
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Chapter 13

Capacity Planning and


Queuing Models

BY
GROUP 2
GROUP MEMBERS
Roll No. Name
MBA-II-12 Ye Yint Aung
MBA-II-13 Theint Theint Aye
MBA-II-14 Yin Yin Aye
MBA-II-15 Win Bo
MBA-II-16 Khaing Zar Kyi Hein
MBA-II-17 Lin Phyoe Hein
MBA-II-18 Htet Aung Hlaing
MBA-II-19 Soe Htay Hlaing
MBA-II-20 Kyawt Kyawt Hlaing
MBA-II-21 Chaw Su Hlaing
MBA-II-22 Khaing Su Hlaing
MBA-II-97 Paing Phyo Thu
Learning objectives

 Discuss the strategic role of capacity planning.

 Describe a queuing model using the A / B / C notation.

 Use queuing models to calculate system performance measures.

 Describe the relationships between queuing system characteristics.

 Use queuing models and various decision criteria for capacity planning.
What is capacity planning?

 The capacity planning decision involves a trade-off between the cost of


providing a service and the cost or inconvenience of customer waiting.

 The cost of service capacity is determined by the number of servers on duty,


whereas customer inconvenience is measured by waiting time.
Economic Trade-Off in Capacity Planning
What is capacity planning?
 Capacity is the ability to deliver service over a particular time period.

 Capacity is determined by the resources available to the organization in the form of


facilities, equipment, and labor.

 Capacity planning is the process of determining the types and amounts of resources
that are required to implement an organization’s strategic business plan. The objective
of strategic capacity planning is to determine the appropriate level of service capacity
by specifying the proper mix of facilities, equipment, and labor that is required to meet
anticipated demand.
What is capacity planning?
 Capacity planning is a challenge for service firms because of the open system
nature of service operations and, thus, the inability to create a steady flow of
activity to use capacity fully.

 For service systems idle capacity (e.g., service providers waiting for
customers) is always a reality.

 Customer arrivals can fluctuate from one minute to the next (e.g., a call center)

 the time customers spend being served also varies (e.g., diners at a gourmet
restaurant
What is capacity planning?

 Because of the inability of services to control the demands placed


upon them, capacity is usually measured in terms of inputs (e.g.,
number of hotel rooms) rather than outputs (e.g., guest nights).
Strategic Role of Capacity Decisions

 Capacity decisions in services have strategic importance based on the


time horizon in question.

 Failure to plan for short-term capacity needs, such as staffing for the
lunch hour, can generate customers for the competition.

 This is particularly true when customers can gauge the expected


waiting time by observing the length of the queue and then renege or
balk, seeking service elsewhere.
Strategic Role of Capacity Decisions

 Facility requirements
Waiting time ( W ) or L = W

 Equipment requirements

 Labor requirement
Analytical Queuing Models

Classification of Queuing Models


Standard M/M/ 1 Model
The derivation of the standard M / M /1 model requires the following set of
assumptions about the queuing system:
1. Calling population. An infinite or very large population of callers arriving.
2. The callers are independent of each other and not influenced by the queuing
system (e.g., an appointment is not required).
2.Arrival process. Negative exponential distribution of interarrival times or
Poisson is tribution of arrival rate.
3.Queue configuration. Single waiting line with no restrictions on length and no
balking or reneging.
4. Queue discipline. First-come, first-served (FCFS).
5.Service process. One server with negative exponential distribution of service
times.
This formula is used for the single sever queuing system.

M / M /1 Queue Configuration
Standard M/M/c Model

M/M/c Queue Configuration

This formula for the single queue, multiple server queuing system
The assumptions for the standard M / M / c model are the same as those
for the standard M / M /1 model, with the stipulation that service rates
across channels be independent and equal.

M/M/c Model Curves for L s

These curves graphically demonstrate the excessive congestion that occurs as one
attempts to gain full utilization of service capacity. The curves also can be used to
demonstrate the disproportional gain that occurs when congestion is reduced by
M/G /1 Model M/G / Model

Finite-Queue M/M /1 Model


Capacity Planning Criteria

Queuing theory indicates that, in the long run, capacity to serve must exceed
the demand. If this criterion is not met, at least one of the following adjustments
must occur:
1. Excessive waiting by customers will result in some reneging (i.e., a
customer leaves the queue before being served) and, thus, in some reduction of
demand.
2. Excessive waiting, if known or observed by potential customers, will cause
them to reconsider their need for service and, thus, will reduce demand.
3. Under the pressure of long waiting lines, servers may speed up, spending
less time with each customer, and, thus, increase service capacity. A gracious
and leisurely manner, however, now becomes curt and impersonal.
4. Sustained pressure to hurry may result in eliminating time consuming
features and performing the bare minimum and, thus, service capacity s
increased.
Average Customer Waiting Time

Analytical queuing models can help service system managers to evaluate


possible alternative courses of action by predicting waiting time statistics. The
models also provide insights that help to explain such queuing phenomenaas
pooling, the effect of finite queues on realized demand, the nonproportional
effects of adding servers on waiting time, and the importance of controlling
demand as seen by reducing service time variance. The approach to capacity
planning depends on the criterion of system performance being used.
Further, queuing models are useful in the analysis because of their
ability to predict system performance. If the queuing model
assumptions are not met or the system is too complex, however, then
computer simulation modeling as addressed in the chapter supplement
is required.
Thank You

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