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
FOR each of the following cases, indicate why management and the auditors determined that control deficiency was a material weakness. Case1. In our assessment of the effectiveness

Risk seeking:  A risk seeker is a decision maker who is concerned in the best likely outcome no matter how small the chance that they might take place i.e. he takes high risks

CONTINUOUS PROBABILITY DISTRIBUTION (USE OF NORMAL DISTRIBUTION) In reality the C-V-P variables might take any values in a continuous range. It could therefore be more appropriat

Identify whether each of the following transactions involves spot exchange, contract, or vertical integration. For the last item if the contract length is optimal or suboptimal.

Disadvantages of ratio analysis 1) False results: ratios are based upon the financial statement. In case financial ratio is incorrect or the data upon which ratios are based

what is Long term budgets Long term budgets: The budgets are prepared to depict long term planning of the business. The period of long term begets various between five to ten

how company apply marginal costing techniques show with an example

Treasury management is explained as "the corporate handling of all financial matters, the production of external and internal funds for business, the management of cash flows and c

Types of Costs In short run, costs can be of three general kinds: Fixed Cost: Total fixed costs stay constant as volume differs in the relevant range of production. Fixe

Accounting Method is the method by which income and expenses are accounted for taxation purposes. The Internal Revenue Service needs taxpayers to select an accounting method that p