Flow of the presentation
Sector• Choice of Sector : Retail
Pre analysis• Observation & Introduction• Observe Market Generally• Market Structure• Introduction• Rush hours• Days of Rush• Purchasing Cycle• 1st Week of the month• Ist Sunday• Eid Public Holidays Ramzan
Situation Arriving Customers
Service Facility
Passage of customers through a retail outlet checkout
Shoppers Checkout/cash counters
Problem FormulationProblem StatementWhy does the queues formed at chase up are too long during peak hours?Objective: Analysing the Bottle Neck at chase up’s cash counter during peak hours i.e. - weekends, - occasional holidays, - first week of every month- Seasonal SalesNeed of this analysis arises as we observe the unsystematic way of queuing at Chase.• We characterized our Queuing Analysis in terms of store
location i.e. Bahadurabad.
• In order to analyse and solve the queuing management system at Chase up, we will use a single stage queuing model with multiple queues and multiple servers.
Single stage queuing model with multiple queues and multiple parallel servers
Characteristics of the model
Arrival Characteristics Size of the calling population?
- Infinite: The source of customers can be finite or infinite. For example, all people of a city or state (and others) could be the potential customers at a retail outlet. The number of people being very large, it can be taken to be infinite. Patterns of arriving? - Random: Arrivals are considered random when they are independent of one another and their occurrence cannot be predicted exactly. Behavior of the arrivals i.e. patient or balking?- Depends on time of the day or day of the week
Characteristics of the model
Waiting Line CharacteristicsLength of line- InfiniteQueue discipline
- FIFO: (First in, First out): a customer that finds the service center busy goes to the end of the queue.
Service Facility CharacteristicsConfiguration of service system (no of servers and
phases)?- 10 servers; single phaseService time distribution (constant or random)?
Chase Up• Opens at 11 am (Fridays – 3 pm)• Rush Timings start from 6 pm• Peak hours 9 pm – 11 pm• Foot fall - 200 -300 people at a time• Days : Friday, Saturday, Sunday• Layout : 7 grocery cash counters• 2 garments• 1 pharmacy
Data Collection MethodsPrimary Data:
• Observations
• The observations for number of customers in a queue, their arrival-time and departure-time were taken without distracting the employees. The whole procedure of the service unit each day was observed and recorded using a time-watch during the same time period for each day.• Telephonic interview• Face to face (customer interaction)
• Qualitative Data:•
• Quantitative Data• Waiting lines
Variables
• λ= Mean number of customer arrivals per time period
• µ= Mean number of customers served per time period
• ρ= Utilization factor for the system• L= Average number of customers in the system• Lq= Average number of customers waiting in the
system• W= Average time each customer spends in the
system• Wq = Average time each customer spends in the
queue
Present System• λ= 400 customers arrive per hour on average• µ= 41 customers served per hour on average by
each counter
Operating Characteristics
Present System
L 46 customers
Lq 37 customers
W 6.94 mins
Wq 5.48 mins
U 0.98
Alternatives
Alternative 1:Mobile cash counter to accommodate additional customers during peak hours through effective utilization of space.• λ= 400 customers arrive per hour on average• µ= 39 customers served per hour on average by
each counterOperating Characteristics Alternative 1
L 21 customersLq 10 customers
W 3.12minsWq 1.65mins
U 0.89
Cost-Benefit Analysis (Alternative-1)
Assumption: Each one-minute reduction in customer waiting time avoids Rs.1000 in lost sales per week.Cost: Mobile cash counter = PKR 15000 (one-time cost)- No additional costs in terms of hiring additional staff, will be managed by an existing employee.Benefit:Reduction in minutes= 5.48-3.25=2.23 minutesPer week extra savings = 2.23 * 1000= Rs. 2230Mobile Cash Counter is paid off in 7 weeks
Alternative 2:2 additional cash counters.• λ= 400 customers arrive per hour on average• µ= 37 customers served per hour on average by
each counterOperating Characteristics
Alternative 2
L 15 customersLq 4 customers
W 2.19minsWq 0.8mins
U 0.87
Cost-Benefit Analysis (Alternative-2)• Cost of a new counter= Rs25000 i.e. Rs50000 for
2 counters• Cost of additional employee= Rs1000/week i.e.
Rs2000 for 2 employees• Reduction in minutes= 5.48-0.8=4.68 minutes• Weekly Savings= 4.68*1000= Rs4680-
2000=Rs2680• Counters are paid off in 50000/2680= 19 weeksAfter Rs50000 recovered, alternative 2 would provide Rs2680-2230= Rs450 more savings per week.
Alternative 2:• Happy Hour i.e. 20% additional discount on
all discounted items on weekends morning i.e. 12pm-3pm.
• Cost- Have to forgive the Profit Margin from 5Additional 5% of cost
Benefit:
Solution
Managerial Implications
Generalization