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Session 7 - SOR

Here are the key points to consider in determining the optimal number of tellers: - Total waiting time decreases as the number of tellers increases, reaching a minimum at the optimal point - Increasing tellers beyond the optimal point does not further reduce waiting time - Each additional teller costs Rs. 40/hour in wages - Waiting time costs Rs. 10 per minute in lost goodwill - The optimal solution balances the decreasing costs of waiting time vs the increasing costs of additional tellers Rather than being under or overcapacitized, the optimal solution achieves the right balance of capacity and costs. Operating at the optimal point minimizes the total system costs of waiting plus capacity. Both under and over that point

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53 views18 pages

Session 7 - SOR

Here are the key points to consider in determining the optimal number of tellers: - Total waiting time decreases as the number of tellers increases, reaching a minimum at the optimal point - Increasing tellers beyond the optimal point does not further reduce waiting time - Each additional teller costs Rs. 40/hour in wages - Waiting time costs Rs. 10 per minute in lost goodwill - The optimal solution balances the decreasing costs of waiting time vs the increasing costs of additional tellers Rather than being under or overcapacitized, the optimal solution achieves the right balance of capacity and costs. Operating at the optimal point minimizes the total system costs of waiting plus capacity. Both under and over that point

Uploaded by

Nilisha Deshbhratar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Managing Waiting Line

Why waiting lines form??

15 hours worth of work is given to an employee in 8 hours shift.

Would it result in work waiting at the end of the shift?


Work load > Capacity

Is this the only reason for formation of waiting line?


Workload < service facility capacity

Case 1: Would there be a waiting line, if a customer arrives exactly


every 15 seconds and is served in exactly 14 seconds?

Case 2: Would there be a waiting line, if a customer arrives not exactly


in every 15 seconds but on an average every 15 seconds and is served
on an average every 14 seconds?

a. Variance in arrival
b. Variance in service
Certain negative customer behaviors in a queue

Balking occurs when arriving customer(s) sees a long queue and decides
not to seek service.

Reneging occurs when customer(s) in queue departs before obtaining


service.
Jockeying occurs when customer(s) switch queues in anticipation of
earlier service

Video - Stay in the queue


Single server system – Multiple queues

SERVER

SERVER

Balking
Higher number of such single server system
Jockeying
Multiple server system – Single queue

Balking and Reneging ??


Jockeying??
Virtual queue

Balking and Reneging or Jockeying ??


Waiting time vs. capacity

How do waiting time relate to capacity?


One Teller scenario
o Only one Teller present to serve.
o One customer one transaction.
o As soon as the Teller is done serving one customer, he/she proceed
serving the next customer.
Customer arrival Transaction Transaction Cust. Waiting time Leaves
time time (mins) (mins) teller
08:00 Balance inquiry 1 0 08:01
08:04 Deposit and balance inquiry 2 0 08:06
08:08 Open a savings bank account 25 0 08:33
08:19 Demand draft 10 14 08:43
08:25 Deposit and passbook updation 3 18 08:46
08:29 Deposit cash and balance 2
inquiry 17 08:48
08:46 Deposit 1
08:52 Deposit and balance inquiry 3 2 08:49
08:54 Deposit and passbook updation  3 0 08:55
1 08:58
Wait time
(Minutes) Only one Teller present to serve
0 /One customer one transaction
0
0
14 Total transaction time 50 mins
18 Available time 60 mins
17
2
0
1
52 Total customer wait time
Waiting line can form even if total workload is less than capacity
Two teller Scenario
Two teller present to serve/One customer one transaction/If both the Tellers are free customer
can randomly go to any of the two Tellers for service.
Custom Transaction Trascn.
er Time
arrival (mins) Cust. Leaves Leaves
time Waiting time Teller Teller
(mins) 1 2
08:00 Balance inquiry 1 0 08:01 -
08:04 Deposit and balance inquiry 2 0 - 08:06
08:08 Open a savings bank account 25 0 08:33 -
08:19 Demand draft 10
0 - 08:29
08:25 Deposit and passbook updation 3
4 - 08:32
08:29 Deposit cash and balance inquiry 2
3 - 08:34
08:46 Deposit 1
0 08:47 -
08:52 Deposit and balance inquiry 3
0 08:55 -
08:54 Deposit and passbook updation  3
0 - 08:57
0
0 Total transaction time 50 mins
0
0
Available time 120 mins
4
3
0
0
0
7 Total customer wait time
One Teller Two Teller
Scenario Scenario
Work-load 50 mins 50 mins
Service capacity 60 mins 120 min
Customer 52 mins 7 mins
waiting time

Waiting time will not be linearly related to capacity


Determine waiting time

Customer Transaction Trascn. Time


arrival (mins)
time
Determine customer waiting time
08:01 A 2
08:07 B 10 considering
08:09 C 4
08:20 D 13 a) Single Teller;
08:31 E 9
08:39 F 2
08:40 G 7 b) Two Tellers;
08:52 H 5
08:54 I  3
Economics of waiting line

Cost of capacity
Cost of waiting
Total System Cost

Cost

Low capacity Service facility capacity High capacity


In a particular cooperative bank, the management needs to decide the
optimal service capacity (per hour) in terms of the number of Tellers that
need to be put on job for servicing the customers. Based on the empirical
analysis from historical waiting line data, the management estimates that
the total waiting time accumulated per hour follows the following function.

Where t is the number of Tellers.


Further, the management estimates that the cost of waiting in terms of lost
goodwill is Rs 10 per minute .
The management deploys contract workers for a typical Teller position.
Owing to the minimum wage requirement, the bank must pay Rs. 40 / hour
to a Teller.
1. How many Tellers should the Bank put on job?
2. Does the given scenario follow the economics of a waiting line. Consider
cost(s) ranging from 2 Tellers lesser than optimal number to 2 Tellers
higher than optimal number.
3. Would you keep your system rather overcapacitized or undercapacitized?

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