IPPTChap 0013

CAPACITY PLANNING
AND QUEUING MODELS

Chapter
13
McGraw-Hill/Irwin
Copyright 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
Discuss the strategic role of capacity planning.
Describe a queuing model using 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.
13-2
Capacity Planning Challenges

Providers lack ability to create a steady flow of demand to
utilize capacity fully.

Idle capacity is a reality for services
Customer arrivals fluctuate and service demands also
vary.
Customers are participants in the service and the level of
congestion impacts on perceived quality.
Inability to control demand results in capacity measured in
terms of inputs (e.g. number of hotel rooms rather than
guest nights).
13-3
Strategic Role of Capacity

Decisions
Long-range capacity can be used as a preemptive
strike where market is too small for two competitors

(e.g. first to build a luxury hotel in a mid-sized city)
Lack of short-term capacity planning can generate
customers for competition (e.g. restaurant staffing)
Capacity decisions balance costs of lost sales if
capacity is inadequate against operating losses that
result when demand does not reach expectations.
A strategy of building ahead of demand often is taken
to avoid losing customers.
13-4
Queuing System Cost Tradeoff

Let: Cw = Cost of one customer waiting in
for an hour
Cs = Hourly cost per server
C = Number of servers
queue
Total Cost/hour = Hourly Service Cost + Hourly

Customer Waiting Cost
Total Cost/hour = Cs C + Cw Lq
Note: Only consider systems where
13-5
Queuing System Cost Tradeoff
13-6
Queuing Formulas
Single Server Model with Poisson Arrival and Service Rates: M/M/1
1. Mean arrival rate:
2. Mean service rate:
3. Mean number in service:
n
4. Probability of exactly n customers in the system: Pn (1 )
5. Probability of k or more customers in the system: P (n k ) k
6. Mean number of customers in the system:
Ls
7. Mean number of customers in queue:
Lq
1
8. Mean time in system:
Ws
9. Mean time in queue:
Wq
13-7
Queuing Formulas (cont.)

Single Server General Service Distribution Model: M/G/1
2 2 2
Lq
2(1 )
Mean number of customers in queue for two servers: M/M/2
3
Lq
4 2
Relationships among system characteristics:
Ls Lq
Ws Wq
Ws
Wq
Ls
Lq
13-8
.
Congestion as 10
100
10
Then:
Ls
0
0.2
0.5
0.8
0.9
0.99
6
4
2
0
0
With:
Ls
0
0.25
1
4
9
99
1.0
13-9
Foto-Mat Queuing Analysis

On average 2 customers arrive per hour at a Foto-Mat to process film.
The one clerk in attendance spends an average of 15 minutes
per customer.
1. What is the average queue length and average number of customers
in the system?
2. What is the average waiting time in queue and average time spent
in the system?
3. What is the probability of having 2 or more customers waiting in
queue?
4. If the clerk is paid $4 per hour and a customers waiting cost in queue
is considered $6 per hour, what is the total system cost per hour?
5. What would be the total system cost per hour, if a second clerk were
added and a single queue were used?
13-10
White & Sons Queuing Analysis

White & Sons wholesale fruit distributions employs a single crew whose
job is to unload fruit from farmers trucks. Trucks arrive at the unloading
dock at an average rate of 5 per hour Poisson distributed. The crew is
able to unload a truck in approximately 10 minutes with exponential
distribution.
1. On average, how many trucks are waiting in the queue to be
unloaded?
2. Management has received complaints that waiting trucks block the
alley to the business next door. If there is room for 2 trucks at the
loading dock before the alley is blocked, how often will this problem
arise?
3. What is the probability that an arriving truck will find space available
at the unloading dock and not block the alley?
13-11
12
Capacity Analysis of Robot

Maintenance and Repair Service
1.
2.
3.
4.
A production line is dependent upon the use of assembly robots that break
down periodically and require service. The average time between
breakdowns is three days with a Poisson arrival rate. The average time to
repair a robot is two days with exponential distribution. One mechanic
repairs the robots in the order in which they fail.
What is the average number of robots out of service?
If management wants 95% assurance that robots out of service will not
cause the production line to shut down owing to lack of working robots, how
many spare robots need to be purchased?
Management is considering a preventive maintenance (PM) program at a
daily cost of $100, which will extend the average breakdowns to six days.
Would you recommend this program if the cost of having a robot out of
service is $500 per day? Assume PM is accomplished while the robots are
in service.
If mechanics are paid $100 per day and the PM program is in effect, should
another mechanic be hired? Consider daily cost of mechanics and idle
robots.
13-12
Determining Number of Mechanics

to Serve Robot Line
1. Assume mechanics work together as a team
M
Mechanics
in Crew (M)
2
1/2
1/ 6
1/ 3
1/ 2
1/ 6
1/ 6
1
3/2
1/ 6
1/ 9
3/ 2
$100 M
Mechanic cost
100(1)=$100
100(2)=$200
$300
100(3)=$300
$362
Ls
1/ 6
1/ 2
1/ 2 1/ 6
$500 Ls
Robot idleness
Total system
Cost per day
500(1/2)=$250
$350
1/ 6
1/ 5
1 1/ 6
500(1/5)=$100
1/ 6
1/ 8
3 / 2 1/ 6
500(1/8)=$62
13-13

to Serve Robot Line
2. Assume Robots are divided equally among mechanics who work alone
Identical
Queues (n)
/n
/n
$100 n
Mechanic
cost
Ls
/n
/n
$500 Ls (n)
Robot idleness
1/ 6
1/ 3
$100
1/ 2
1/ 12
1 / 12
1/ 6
1/ 2
$200
1 / 12
1 / 5 500 (1/5) 2=$200
1 / 2 1 / 12
$250
Total System
Cost per day
$350
$400
13-14

to Serve Robot Line
3. Assume two mechanics work alone from a single queue.
3
1/ 6 1
Ls
2
Note:
4
1/ 2 3
= 0.01 + 0.33
= 0.34
Total Cost/day = 100(2) + 500(.34) = 200 + 170 =$370
13-15
Comparisons of System
Performance for Two Mechanics
System
Ls
Single Queue
with Team Service
1/ 6
1/ 5
11/ 6
Single Queue
with Multiple
Servers
3
0.34
4 2
Multiple Queue
and Multiple
Servers
1 / 12
1/ 5
1 / 2 1 / 12
Ws
Ls
Wq Ws
6/ 5 =1.2 days
0.2 days
6 (.34) = 2.06 days
0.06 days
12 (1/5) =2.4 days
0.4 days
13-16
Single Server General Service

Distribution Model : M/G/1
2 2 2
Lq
2(1 )
1. For Exponential Distribution:
2 2 / 2
2 2
2
Lq
2(1 )
2(1 ) (1 )
2. For Constant Service Time:

2
Lq
2(1 )
1
2
2 0
3. Conclusion: Congestion measured by Lq is accounted for equally b

variability in arrivals and service times.
13-17
General Queuing Observations

1. Variability in arrivals and service times contribute equally to
congestion as measured by Lq.
2. Service capacity must exceed demand.
3. Servers must be idle some of the time.
4. Single queue preferred to multiple queue unless jockeying
is permitted.
5. Large single server (team) preferred to multiple-servers if
minimizing mean time in system, WS.
6. Multiple-servers preferred to single large server (team) if
minimizing mean time in queue, WQ.
13-18
Lq for Various Values of

C and
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1
C=1
0.026
0.05
0.083
0.129
0.188
0.267
0.368
0.5
0.672
0.9
1.207
1.633
2.25
3.2
4.817
8.1
18.05
C=2
0.001
0.002
0.004
0.007
0.011
0.017
0.024
0.033
0.045
0.059
0.077
0.098
0.123
0.152
0.187
0.229
0.277
0.333
C=3
0.002
0.003
0.004
0.006
0.008
0.011
0.015
0.019
0.024
0.03
0.037
0.045
C=4
0.003
0.004
0.005
0.007
13-19
Houston Port Authority

Prepare a queuing analysis to evaluate the alternative
of adding another unloading crew or purchase of a
pneumatic handling system. The recommendation
should include a total cost analysis of each alternative.
13-20
Freedom Express
1. During periods of bad weather, as compared
with periods of clear weather, how many
additional gallons of fuel on average should
FreeEx expect its planes to consume because
of airport congestion?
2. Given FreeExs policy of ensuring that its planes
do not run out of fuel more than 1 in 20 times
while waiting to land, how many reserve gallons
(i.e, gallons over and above expected usage)
should be provided for clear-weather flights?
For bad-weather?
13-21
Freedom Express (cont.)

3. During bad weather, FreeEx has the option of instructing
the Washington air controller to place its planes in a holding
pattern from which planes are directed to land either at
Reagan National or at Dulles International, whichever
becomes available first. Assume that the Dulles landing
rate in bad weather also is 30 per hour, Poisson distributed,
and that the combined arrival rate for both airports is 40 per
hour. If FreeEx must pay $200 per flight to charter a bus to
transport its passengers from Dulles to Reagan National,
should it exercise the option of permitting its aircraft to land
at Dulles during bad weather? Assume that if the option is
used, FreeExs aircraft will be diverted to Dulles about onehalf the time.
13-22
Renaissance Clinic Patient Flow
Nurse Clinician
N = 30
1
= 30
Receptionis
t
R =40
12
Physician
D = 15
(1-1)
13-23
Renaissance Clinic (A)

Value
30/hr
2/3
Description
Arrival rate of patients
Fraction of patients to nurse
clinician
Fraction of nurse clinician patients
to MD
Service rate of receptionist
Service rate of nurse clinician
30/hr
Service
rate of doctor
15/hr
See Figure 13.6 for Renaissance Clinic Schematic
1
2
0.15
40/hr
13-24
Renaissance Clinic (A) Questions

1.
Assume the waiting lines at the receptionist, the nurse

clinician, and the physician are managed
independently with FCFS priority. Using queuing
formulas and the assumption that patients exiting from
an activity follow a Poisson distribution, estimate the
following statistics:
a. Average waiting time in each of the queues (i.e.,
receptionist, nurse clinician, physician).
b. Average time in the entire system for each of the
three patient paths.
c. Overall average time in the system (i.e., expected
time for an arriving patient).
d. Average idle time in minutes per hour of work for the
receptionist, nurse clinician, and physician.
13-25
Renaissance Clinic (A) Questions

2. What are the key assumptions involved in your analysis
above? Discuss the appropriateness of each in this
situation.
3. What would be the impact of the above calculations of
adding a second doctor to the clinic and sharing the
doctor queue between them on a first MD available
basis?
4. The clinic is considering adopting a queue priority
system that is determined by the time of entry into the
system at the receptionist. How might patients waiting
for the doctor react to this policy?
13-26
Topics for Discussion

Discuss how one could determine the economic cost of keeping
customers waiting.
Example 13.1 presented a nave capacity planning exercise
criticized for using averages. Suggest other reservations about
this planning exercise.
For a queuing system with a finite queue, the arrival rate can
exceed the capacity. Explain with an example how this is
possible.
What are some disadvantages associated with the concept of
pooling service resources?
Discuss how the M/G/ model could be used to determine the
number of emergency medical vehicles required to serve a
community.
13-27
Interactive Exercise
Go to ServiceModel on the support material and select
the Customer Service Call Center demo model. Run
the animated simulation and display the results. Have
the class explain in terms of queuing theory why the
revised layout has achieved the remarkable reductions
in average and maximum hold times.
13-28

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CAPACITY PLANNING

AND QUEUING MODELS

Copyright 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

Capacity Planning Challenges

utilize capacity fully.

Strategic Role of Capacity

strike where market is too small for two competitors

Queuing System Cost Tradeoff

Total Cost/hour = Hourly Service Cost + Hourly

Queuing System Cost Tradeoff

3. Mean number in service:

7. Mean number of customers in queue:

9. Mean time in queue:

Queuing Formulas (cont.)

Foto-Mat Queuing Analysis

White & Sons Queuing Analysis

Capacity Analysis of Robot

Determining Number of Mechanics

Determining Number of Mechanics

Determining Number of Mechanics

6 (.34) = 2.06 days

12 (1/5) =2.4 days

Single Server General Service

2. For Constant Service Time:

3. Conclusion: Congestion measured by Lq is accounted for equally b

General Queuing Observations

Lq for Various Values of

Houston Port Authority

Freedom Express (cont.)

Renaissance Clinic Patient Flow

Renaissance Clinic (A)

Service rate of nurse clinician

Renaissance Clinic (A) Questions

Assume the waiting lines at the receptionist, the nurse

Renaissance Clinic (A) Questions

Topics for Discussion

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