Learning Goal: I’m working on a business multi-part question and need an explanation and answer to help me learn.
I would apply a waiting line analysis to the common grocery store line. Anderson et al., (2016) mentions that waiting line decisions frequently involve a subjective evaluation of its operating characteristics. Therefore, I would consider the tenure and motivation of the checkout clerk when scheduling them. In addition, I would factor in the busiest times of days and business days overall and staff them with the most tenured and driven clerks. I would schedule newer colleagues on the slower times so that they can gain more effective training which in turn, would reduce the possibility for error and customer dissatisfaction. Moreover, the new colleague would be less likely to be overwhelmed, potential leading to negative attrition. Overall, when this is practiced, employee and customer satisfaction is increased, leading to profitability and reduced error cost.
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Queuing theory known as the waiting line model – investigates every aspect of waiting in line, such as the arrival process, the service process, the number of servers, the number of system spaces, and the number of customers—who might be humans, data packets, automobiles, or anything else (Mansa, J., 2022). My current employer’s cafeteria is well-equipped with a variety of foods, which normally draws a significant share of the staff during the open cafeteria hours of 11-1pm. While the cooks are efficient at preparing the meals behind the grill, the waiting line to pay is where the main time constraint exists. With only one cashier, the line to pay for lunch gets long and the wait time tends to extend past a “couple” of minutes. I would apply the waiting line model to analyze the current total wait time for an employee to order lunch, receive their lunch and make it through the line to pay for lunch. I would then take this analysis and compare it to the wait time that would be analyzed if the cafeteria added another cashier.
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We all face waiting line situations in everyday life- in traffic, when calling a busy company, at the store, etc. The longest waiting line situation I face each week is the pickup line at my daughter’s school. Parents get in line up to 30 minutes early so they can get a prime spot in line. The configuration of the parking lot for pickup is not ideal, as it fills up quickly and the line spills out onto a main road. The process of getting children in their cars as quickly as possible is not ideal either. Waiting line analysis could be used to determine the best possible way of improving this system. We would be looking for decreases in waiting time as well as parent and staff satisfaction. The physical structure of the waiting area should be considered, along with staffing needs, strategies for getting children safely and quickly into their cars, and the cost of improvements (Korstanje, 2020). This analysis could result in significant improvements at my daughter’s school.
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According to Anderson et al. (2016), before doing an economic study of a waiting line, a total cost model that incorporates the cost of waiting, as well as the cost of service must be created. A manager may then wish to determine the cost of running a waiting line system and base system design decisions on a minimum hourly or daily operating cost. There are three measurements that can be used to determine the economics of a waiting line, population – the average number of customers in a line, wait time – average amount of time spent waiting, and system utilization rate – what percentage of time are servers busy (The Business Economics of Waiting Lines, 2016). Expanding services to reduce waiting times can be justified when a business sees the potential to invest in another service if it means more customers, long-term profit, or business sustainability.
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Conducting an economic analysis of a waiting line involves obtaining reasonable estimates of the waiting cost and service cost (Anderson et al., 2016). The waiting cost is usually subjective and is the assigned value that if a customer takes their business elsewhere, that potential profit is lost. I would first consider one of two approaches, what is the net profit that would be gained off the customer’s current checkout items or, what is the average net profit of a transaction during x-amount of time. For a real-time and more accurate accounting, I would apply the current cart value approach and the latter for determining the value over a period of time. Recognizing historical data such as customer to checkout staff ratio and sales volume would be beneficial in improving service to reduce waiting lines. However, the likely root cause of waiting line profit losses can usually be bypassed early on if the proper clerks are hired who understand the value of customer service and are equipped with resources that can support high volume business.
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