Queuing theory, Managerial Accounting

QUEUING THEORY

When limited facilities fail/delays to satisfy demands made upon them, problems occur which generate queues or waiting lines. Illustrations are:

•    Customers waiting at cash desks in a supermarket or bank
•    A stock of items in a warehouse awaiting storage
•    Letters in an ‘in’ tray waiting to be opened
•    Telephone calls to a switchboard waiting to be answered.

In business, queues have certain ‘economic’ or ‘cost’ implications;

It may be too costly for a company to allow long queues to develop. E.g. if employees queue up at a store counter for new material supplies, the company will incur the cost of idle time and lost production due to their time spent waiting.

It will probably be costly to speed up service, and thus reduce waiting time and queue lengths because it would be necessary to employ extra service assistants, service counters or service equipment.

Customers may expect to be served within a certain length of time; otherwise they may take their custom elsewhere. Queuing problems are therefore concerned with:

•    Average waiting times
•    The average length of queues (i.e. the average number of people in a queue or service system)
•    The cost of a servicing system.

The management may therefore wish to provide a servicing system which either: minimize the joint costs of: a) servicing customers b) (idle) time waste by customers in the queue or balance the requirement to provide a satisfactory service time with the interests of economy i.e. to provide a reasonably quick service but at a relatively low cost.

Posted Date: 12/6/2012 7:19:51 AM | Location : United States







Related Discussions:- Queuing theory, Assignment Help, Ask Question on Queuing theory, Get Answer, Expert's Help, Queuing theory Discussions

Write discussion on Queuing theory
Your posts are moderated
Related Questions
Arrival Rates, Service Rates, and Traffic Intensity The (average) arrival rate is the rate of arrival of customers at a queue, and is often denoted by x. If 10 customers arr

given a scenario when iddle capacity is less than the special order.in this case should we accept or reject the order

Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $171,200 of total manufact

Break even analysis and target profit, taxes - Patterson Parkas Company's sales revenue is $30 per unit, variable costs are $19.50 per unit, and fixed costs are $147,000. a)Compute

Break even point or B.E.P. pricing method : Break even point is the volume of sales at which the total sale revenue of the product is equal to its total cost. In other words, it

Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three serv

Extensions to Linear Programming In many real situations the solutions to linear programming models make sense only if they have integer values. Rounding off the linear programmi

Determine the Profitability ratios in relation to investment a) Return on capital employed/ return on investment b) Return on equity or return on equity share holders' funds

What are the Objectives of Intra company transfer pricing The objectives of Intra company transfer pricing are: 1) Evolution of performance and efficiency of each division.

underlying assumptions of breakeven analysis and the limitations of this.