finak copy tom study guide mid2 - Service Management 1 2 Quantifying Queues Variables-Service Rate Average number of customers that a service provider

finak copy tom study guide mid2 - Service Management 1 2...

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Service Management 1 & 2 Quantifying Queues Variables: -Service Rate ( μ ): Average number of customers that a service provider can serve per unit of time. -Arrival Rate ( λ ): Average number of customers arriving per unit of time -Utilization Rate ( ρ ): If arrival rate > average service rate, utilization is > 100% If arrival rate < average service rate, utilization ρ = λ / μ -Customers in the System (L): Total number of customers in system = L Number of customers in queue = Lq -Time in the system (W): Total time in system = W Time in queue = Wq Formulas: -# of customers in system = L = λ / (μ – λ) or L= Lq + (λ / μ) -# of customers waiting in Line = Lq = ρ L -Customer Time spent in system = W = 1/ (μ – λ) or W = Wq + (1 / μ) -Customer Time waiting time in line = Wq = ρ W Sources of Variability: - Variability in interarrival times (arrival rates) -Variability in Processing Times (servicing rates) -i.e. Proficiency/ process approach varies among staff, customer requirements vary *High variability + high utilization accumulate WIP and increase TPT Improving system performance- Demand Management: -Interarrival times: smoothing of demand (promotions) -Process times: Schedule staff at peak loads -Process CT: staff versatility- move to load -Uneven utilization : remove specialization removes ‘lumpiness’, drives WIP and TPT down -If customers value process speed: teams should work on service request end-to-end (all process steps) Types of Services: -Positive: we look forward to using; competition across all industries (ie: resorts, cruises) -Routine: we use every day, most familiar; competition within one industry (i.e. McDonalds, gas station, banks) -Negative: Services we never want to use (I.e. hospital stay) Scalability: Ability to increase revenues while costs increase at a much lower rate -use customer as part of service delivery process -mechanization, reduction of face to face interaction -reduction in number of locations Operational Focus in Services -simplification, standardization, modularization (responsibilities well defined), parallelization (rather than serially performed operations) of processes Inventory Management 1 Functions of Inventory: -meet anticipated demand -smooth production requirements -buffer against uncertainty -help hedge against price increases -take advantage of quantity discounts -take advantage of order cycles
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