no line,arrival >serviceinfinite lineinter arrival time= time between arrivalsVariability: the unknown. (Demand)Inter-arrival Times (arrival rates)- rate of new requests “entering” the system is different eachtime, (Service) Processing Time (servicing rates)- staff efficiency varies, process varies among staff, customer order/requirements may varyDemand Management:Improve system performance inter arrival times consider yield management- shifting demand from peak periods smooth demand by pricing or promotions, inform customers of wait times, different time slots.Service Management:Improve system performance allocation- different staff for certain hours, staff versatility, pool and flex resources (remove specialization), use “swat” team for problems, parallelizework- multiple steps done as the same time, modularizework- simplify, standardize, and specialize.Service focus: Simplify, Standardize, Modularize, Parallelize, Learn, Continuous ImprovementScalability Management: decrease face to face interactions, reduce amount of service neededability to increase revenue while increasing cost at a much lower rate, technology (if cheap), customer does more has more responsibility, creates customer loyalty longterm relationsHigh Rates + High Variability + High Utilization = High WIP and High TPTInventory Management ModelsContinuous Review- fixed quantity modelPeriodic Review-fixed time modelEconomic Order Quantity Model:balance between ordering costs and holding costs *any quantity of order that is not the EOQ results in a higher total inventory cost*EOQ: (annual measure) the value of Q (quantity) that minimizes total costsTotal costs = holding costs + ordering costs(QH)/2 + (DS)/QQ* = (2DS)/H(¿)√¿D= annual demand unitsS= order cost per order $H= holding cost in $/unit-time (ic= % of value cost of product)Q: order size (units)Re-order Point (ROP): know EOQ, when should I place the order?ROP- d*(LT)d= weekly demand unitsLT= lead time, the time for your order to reach you (use same units as d)Safety Stock ROP: buffer against uncertainty in demandROP= (demand during the lead time period, μLT) + (safety stock,z *σLT)ROP= μLT+ z * σLTorROP= d*LT + z * σLTz= number of standard deviations, desired service level %σMaterial Requirements Planning (MRP):Demand Types: Independent- demand for finished goods, directly influenced by customer demand(How much?Replenishment approach, EOQ: fixed order quantity, ROS: fixed time period)Dependent-demand for components for other products, parts needed to make more product(How much?Requirements approach, MRP: materials requirements planning)MRP- driven by dependent demand, MRP usually software-based and records every transaction: “Get the right amount of materials to the right place at the right time.” Determines the number of parts, components, and materials needed to produce a product & provides time scheduling information- What? How many?When? USES:BOM Bill of Materials: a complete product description of the product (product structure file/ tree), the materials, parts, components, and production sequence.Time Phased Planning Schedule:order requirements & order release/placement,order requirement time and order release/placementTypes of Services:-Positive:Services we look forward to using. Competition across all positive industries for disposable money and for time.