Foreign Trade University

ContentOverview of service managementService designWaiting line analysis

Characteristics of Service ProductsExtent of customer contactNo inventoryDifficult to measure and evaluate quality of serviceService operations and consumption are at the same time.

Service-System DesignTwo questions should be addressed:

How will the variability of service requirements and customer involvement be addressed?What are implications for operational cost and the customer service experience?

Service-System DesignGeneral requirements for Service Design

Service experience fit: new service should fit into the current service experience for the customer.Operational fit: operational support to executeFinancial impact: reasonable costs

Service-System Design Matrix

Degree of customer/ server contactLowHighBuffered core (none)Permeable system (some)Reactive system (much)Face-to-face total customizationFace-to-face loose specsFace-to-face tight specsPhone contactInternet and on-site technologyMail contact

High

Variability in service requirement

Low

Approaches for Service SystemThe production-line approachExample: McDonalds

The self-service approachExample: ATMs, gas stations, etc.

The personal-attention approachExample: Departments stores, Hotels, etc.Any more?

Characteristics of a Well-designed Service SystemConsistent with the operating focus of the firm.User-friendlyRobustStructuredEffective link between the back and front officeService qualityCost-effective

Waiting Line Analysis Objective: Managing queues to create schedules, job design and achieve effective performances (minimize total costs)

.Requirements for useful queue management:Segment the customersTrain server to be friendlyInform customers of what to expectTry to divert the customers attention when waitingEncourage customers to come during slack periods

The Queuing SystemCharacteristicsPopulation sourceNumber of servers (channels)Arrival and service patternsQueue discipline

The Queuing SystemPopulation SourceCustomer ArrivalsMay be drawn from a finite or an infinite populationFinite Population: limited-size customer pool will use the service and at times, form a line.

Infinite Population: large enough, population size caused by subtractions or additions to the population does not significantly affect the system probabilities.

The Queuing SystemNumber of ServersLine StructuresSingle channel, single phaseSingle channel, multiphaseMultichannel, single phaseMultichannel, multiphaseMixed

The Queuing SystemSingle channel, single phase

First come, first servedExample: one-person barbershop

The Queuing SystemSingle channel, multiphase

A series of services is performed in a fairly uniform sequenceExample: car wash service (vacuuming, wetting, washing, rinsing, drying, window cleaning, parking, )

The Queuing SystemMultichannel, single phaseSeveral linesUneven service time given each customer results in unequal speed or flow among the linesExample: tellers windows in a bank; checkout counters in high-volume department stores,

The Queuing SystemMultichannel, multiphaseSeveral linesTwo or more services are performed in sequenceExample: admission of patients in a hospital, following several steps: initial contact at the admission desk, filling out forms, making identification tags, obtaining a room assignment, escorting the patient to the room, etc

The Queuing SystemMixedMultiple-to-single channel structuresLines merge into one for single-phase service, eg.: a bridge crossing where two lanes merge into oneLines merge into one for multiphase service, eg.: subassembly lines feeding into a main lineAlternative path structures

The Queuing SystemArrival and Service PatternsCustomer arrival rate: described by Poisson distribution.Service time: described by exponential distribution

The Queuing SystemQueue DisciplineDramatic effect on the systems overall performanceDecisions on:The number of customers in lineThe average waiting timeThe range of variability in waiting lineThe efficiency of the service facility

Example of priority rules: reservation first, emergencies first, highest-profit customer first, largest-order first, etc

Queuing Models

ModelLayoutService phaseSource PopulationArrival PatternQueue DisciplineService PatternPermissible Queue LengthTypical Example1Single channelSingleInfinitePoissonFCFSExponentialUnlimitedDrive-in teller at bank, one-lane toll bridge2Single channelSingleInfinitePoissonFCFSConstantUnlimitedRoller coaster rides in amusement park3MultichannelSingleInfinitePoissonFCFSExponentialUnlimitedParts counter in auto agency4Single channelSingleFinitePoissonFCFSExponentialUnlimitedMachine breakdown and repair in a factory

Rule: customer arrival rate can be approximated by a Poisson distribution and service time by exponential distribution: Service rate: Customer arrival rate : The system utilizationPn : The probability of n units in the systemLS : The average number of customers in the systemLq : The average number of customers waiting for the serviceWs : The average time customers spend in the systemWq : The average time customers wait in line

Single Channel, Exponential Service Time

Probability of n units in the system:

Probability of zero units in the system:P0 = 1 - /The average number of customers being served:

System utilization:

Single Channel, Exponential Service Time

The average number of customers in the system:

The average number of customer wait in line:

Single Channel, Exponential Service Time

- The average time customers spend in the system (waiting in line and service time):

- The average time customers wait in line:

Single Channel, Exponential Service Time

Example Western National Bank is considering opening a drive-through window for customer service. Management estimates that customers will arrive at the rate of 15 per hour. The teller who will staff the window can service customer at the rate of one every three minutes. Assuming Poisson arrivals and exponential service, find:Utilization of the tellerAverage number of customers in the waiting lineAverage number of customers in the systemAverage waiting time in lineAverage waiting time in the system, including service

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