Cheat Sheet Spitz - Nat DeBery Dimensions of Service Quality(Convenience Reliability Accuracy Time Responsiveness Courtesy Tangibles Pull System =

Cheat Sheet Spitz - Nat DeBery Dimensions of Service...

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Sources of Variability (For Service Operations) - Variability in Inter-Arrival Times (arrival rate) - Variability in Processing Times (service rate) High Variability + High Utilization = WIP TPT Nat DeBery Dimensions of Service Quality – (Convenience, Reliability, Accuracy, Time, Responsiveness, Courtesy, Tangibles) Pull System = Demand impacts when product is produced Push System = Demand does NOT impact when product is produced Quantifying Queues – Queues are inevitable because there will always be variability, it is important how you manage them - (μ) – Service Rate - Average number of customers that a service provider can serve per unit of time - (λ) – Arrival Rate - Average number of customers arriving per unit of time - (ρ) – Utilization Rate - If arrival rate < average service rate, Utilization Rate = Arrival Rate/Service Rate (ρ = λ/ μ) - If arrival rate > average service rate, utilization is > 100% Average # of Customers in System (L) = Arrival Rate/(Service Rate – Arrival Rate) & L = λ / (μ – λ) Average # Waiting in Line (Lq) = (Utilization Rate)*(Avg. # of Customer in System) & Lq = ρ L Average Customer Time Spent in System (W) = 1 / (Service Rate – Arrival Rate) & W = 1/(μ- λ) Average Waiting Time (Wq) = Utilization Rate * Average Customer Time Spent in System & Wq = ρ W Options to Improve System Performance Reduce variability in demand!!!!!! - Inter-Arrival Times – Yield Management: incentivize smoothing of demand via pricing/ promotion, scheduling system - Process Times – Schedule staff to meet peak loads, standardize work, modularize (clear task, repeated, no creativity) parallelize (different tasks done at the same time) - Addressing Process Cycle Times – Staff versatility to move the load - Uneven Utilization- Pool/flex resources by removing specialization. reduces work ‘lumpiness’: drives WIP TPT Task variety - Customer Values Process Speed – Consider teams to work on service request Managing the “Gaps” - Interpretation Gap Not knowing the customer expectation - Design Gap – Wrong service quality standard - Development Gap – Service performance Gap - Promotion Gap – When promises don’t match delivery Increase in… Output Waiting Customers (Inv.) Business Impact? Service Rate UP DOWN Positive Arrival Rate UP UP Trade-Off Waiting Room Size UP UP Trade-Off Variability DOWN UP Negative # Of Servers UP DOWN Positive
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SUPPLY CHAIN MANAGEMENT - Key problem in the supply chain is uncertainty Truckload (TL) – Truckload of same packages Per unit transport cost is lower than LTL. Higher holding cost.
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