Capacity

Capacity: Capacity refers to the maximum load an operating unit can handle. The operating unit might be a plant, a department, a machine, a store or a worker. Capacity of a plant is the maximum rate of output( goods or services) the plant can produce. Production Capacity: The production capacity of a facility or a firm is the maximum rate of production the facility or the firm is capable of producing. It is usually expressed as volume of output per period of time (i.e. hour, day, week, month, quarter etc.). Capacity indicates the ability of a firm to meet market demand- both current and future. Production managers are concerned with capacity issues because: They want sufficient capacity to meet market demand, Capacity affects production costs, delivery schedules and costs of maintaining facilities, Capacity requires capital for capital assets such as buildings, machinery and equipments etc. Types of Capacity: 1) Fixed Capacity: Fixed capacity refers to the capital assets ( buildings and equipments) a firm possesses at a particular time. It cannot be easily changed in a short period of time. 2) Variable Capacity: Variable Capacity is also called as Adjustable capacity. This refers to the size of the workforce, the number of hours per day or per week the equipment and labour work and the extent of overtime work and subcontracting work. 3) Immediate Capacity: It is that which can be made available within the current budgeted period. 4) Potential Capacity: It is that which can be made available within the decision horizon of the top management (i.e. strategic or long-term planning period). 5) Design Capacity: It is also called as installed capacity. It is the planned rate of output of goods or services under normal working conditions. It sets the upper limit to capacity assuming that there are no capacity losses

6)

7)

8)

9)

due to absenteeism, poor-planning, non-availability of materials, power out, equipment break-down etc. It is the theoretical maximum output that can be possibly attained. Effective or practical or operating Capacity: It is the capacity which can be utilized after taking into account the capacity losses due to inefficiencies, bad planning, rejections and scrap rate etc. It could be 75% to 85% of the design or installed capacity. System or Effective Capacity: It is the maximum output of a specified product or product-mix, a production system can produce. It is less than the desired or installed capacity because of following limitations: changes in product mix quality specifications the balance of equipment and labour Normal or Rated Capacity: It is the estimated quantity of output of production that should be normally achieved taking into consideration the overall efficiency of equipment and labour (estimated by industrial engineering department). The actual capacity which is available for utilization is less than the rated capacity and is expressed as a percentage of rated capacity. Utilized Capacity: This is actual output achieved during a particular time period. The actual output is less than the rated capacity because of limitations due to the factors such as actual demand being less than the rated capacity, employee absenteeism, labour inefficiency, machine capability etc. The actual output will be less than the design capacity due to various constraints on capacity utilization and also due to various constraints on capacity utilization and also due to capacity losses which are difficult to avoid.
Actual Output Design Capacity Actual Output Actual Output System Efficiency = = System Capacity Effective Capacity Utilization =

10) Peak Capacity: It is the maximum output that a process or facility can achieve under ideal conditions. Peak capacity can be sustained only for a few hours in day or a few days in a month. Peak capacity can be reached by using excessive overtime, extra shifts, overstaffing and subcontracting. 11) Excess Capacity or Surplus Capacity: It is the excess or unutilized capacity which is available as surplus to be utilized for any new customer

order or any increase in forecasted demand for a future time period. The excess capacity occurs because of: Seasonal or cyclical fluctuations in demand. Will-full higher installed capacity which is more than the required capacity, taking into consideration anticipated increase in demand. Changes in market conditions (shift in consumers tastes and habits, change in product life cycle stage etc.). Excess Capacity may be utilized to produce current products in excess of demand and building up finished products inventory to be made use of at times of higher demand (more than supply or rated output). 12) Bottle-Neck Capacity: A bottle neck is an operation which has the lowest effective capacity of any operation in the facility and thus limits the systems capacity and output. The work centre or machine in which the lowest effective capacity exists is known as the bottleneck centre and the capacity of the bottle neck centre which puts a limit on the system is referred to as bottle-neck capacity or capacity of the bottle-neck centre or machine. Measurement of Capacity: Capacity of a plant is usually expressed as the rate of output, i.e. in terms of units produced per period of time (i.e. hour, shift, day, week, month, etc.). When firms produce different types of products, it is difficult to use volume of output of each product to express the capacity of the firm. In such cases, capacity of the firm is expressed in terms of money value or production value of the various products produced put together.

Organization Automobile Factory Steel Mill Power Plant Job Shop Hospital University Movie Theatre, Airline Bank Capacity Decisions:

Measurement of Capacity No. of vehicles Tonnes of steel Megawatts of electricity generated Labor hours worked No. of beds No. of students No. of seats No. of accounts

Capacity decisions are based on the following considerations: a. b. c. d. What is size of plant? How much capacity to install? When capacity is needed? When to increase capacity or decrease capacity? What would be the cost of installing the needed capacity?

Importance of Capacity Decisions Capacity decisions are important because: a. They have long-term impact, b. Capacity determines the selection of appropriate technology, type of labour and equipment, c. The success of business depends on the right capacity choice, d. Capacity influences the competitiveness of the firm.

Capacity Planning
Capacity Planning: Capacity planning is concerned with finding answers to the basic questions regarding capacity such as: a. What kind of a capacity is needed? b. How much capacity is needed? c. When this capacity is needed? Capacity plans are made at two levels: 1) Long-term capacity which are concerned with investments in facilities and equipments. These plans cover a time horizon of 2 years or more. 2) Short-term capacity plans which focus on work-force size, overtime budgets, inventories etc. Capacity planning is crucial to the long-term success of an organization. Too much capacity will involve high capital investment and may result in excess or surplus capacity. Too little capacity may cause loss of sales due to the inability of the firm to meet the demand. When choosing a capacity strategy managers have to consider questions such as: a) How much of excess capacity is needed to handle variable, uncertain demand? b) Should the capacity be increased before the demand is made for the future? Capacity planning involves activities such as: 1) 2) 3) 4) Assessing the capacity of existing facilities. Forecasting the long-range future capacity needs. Identifying and analyzing sources of capacity for future needs. Evaluating the alternative sources of capacity based on financial, economical and technological considerations.

5) Selecting a capacity alternative most suited to achieve strategic mission of the firm. Importance of Capacity Planning: Capacity planning is necessary when the organization decides to increase its production or introduce new products the market or to increase the volume of production to gain the advantages in economies of scale. Once the existing capacity is evaluated and a need for new or expanded facilities is determined, decisions regarding the facility location and process technology selection are undertaken. Types of Capacity Planning: The various types of capacity planning are as follows: Based on time-horizon: I. Long-term capacity planning II. Short-term capacity planning Based on amount of resources employed: I. Finite capacity planning II. Infinite capacity planning Long-term capacity planning: Long term capacity planning is done to include major changes that affect the overall level of output in the long-run. The major change could be decisions to develop new product lines, expanding existing facilities and construct new or phase out existing production plants. Short-term capacity planning: Short term capacity planning is concerned with meeting the relatively intermediate variation in demand due to seasonal or economical factors. Short-term capacity planning involves adjusting the capacity to match the varying demand in the short-run by (i) (ii) (iii) use of overtime or idle time increasing the number of shifts Subcontracting to other firms.

Finite and Infinite capacity planning: In production planning, it is important to ensure that the plant has sufficient capacity to adhere to the available time to service the orders or the available capacity to execute the customer order. If the delivery schedule is fixed by the customer, the backward scheduling is done to accommodate this delivery by planning for infinite capacity (i.e. the capacity required to execute the customer order in the shortest period possible). On the other hand, when the customer does not specify the delivery schedule or where the products are produced to stock and sell, it is simpler to use forward scheduling based on finite capacity (i.e. the surplus capacity available to accommodate the new customer order) to arrive at the delivery or completion schedule.

ASPECTS TO BE CONSIDERED FOR CAPACITY PLANNING

1. PREDICTING FUTURE CAPACITY Capacity plans are heavily dependent upon demand forecasting for our output, As we know, Long-range forecasts are difficult to make. Though there is secular trend and cyclical effect, these contingencies are difficult to foresee which affect demand- these contingencies could be Acts of God like drought and floods or man made wars, technological breakthroughs etc. As a rule however, mature products are subject to better prediction than the recent launches. 2. MATURE PRODUCTS WITH STABLE DEMAND GROWTH Electricity, Cement, Fertilizers, Steel, Healthcare and Hospital services, Textiles are some examples of products which have a long PLC and which are at the maturity stage of their PLC. In these cases, the demand does not remain volatile. 3. PREDICTED REQUIREMENTS, CURRENT CAPACITIES AND PROJECTED CAPACITIES DIFFERENCE For Example, The existing receiving and shipping operations and factory warehouse area may accommodate a 50% increase in output, but the assembly line may be operating at full capacity and the machine shop at 90% of capacity. The capacity gaps can then be related to future capacity requirements. Growth rate is approximately 10% per year

Capacity, Units per year______________ Current.. 1987 Predicted Capacity requirements 10,000 Machine shop capacity 11,000 Capacity (gap) or slack Assembly capacity Capacity (gap) or slack 1,000 10,000 ---1989 12,000 -----(1,000) -----(2,000) -----1992 15,000 ----(4,000) ----1997 20,000 ---(9,000) ----

(5,000) (10,000) --------

Receiving, shipping and Factory15,000 Warehouse capacity Capacity (gap) or slack (5,000) 5,000

3,000

------

4. NEW PRODUCTS AND RISKY SITUATIONS It is difficult to predict capacity requirements for new products initially or in the rapid development phase of PLC. There are also situations involving mature, stable products, such as oil, in which the capacity planning environment is risky owing to unstable political factors. Optimistic and pessimistic predictions can have a profound effect on capacity requirements. Below, the optimistic schedule assumes a 20% per year compound growth rate approximately while the pessimistic schedule assumes a 5% compounded growth rate.

Capacity, Units per year______________ Current.. 1987 Expected capacity requirements 10,000 Optimistic requirements Pessimistic requirements 10,000 10,000 1989 12,000 14,500 11,000 1992 15,000 25,000 12,800 1997 20,000 62,000 16,000

5. LARGE OR SMALL CAPACITY INCREMENTS When the enterprise enjoys stable growth, the issues are centered on how and when to provide the capacity rather than if capacity should be added. To meet the growing demand, the added capacity is wither added in small doses frequently or in large doses less frequently. Capacity can be added in anticipation of the growing requirement or can wait till the requirement overtakes the available capacities. 6. ALTERNATIVE SOURCES OF CAPACITY It is not always necessary to create additional capacity. We can also use the facilities intensively (overtime, holiday work, additional shifts) and get more output. We can also sub-contract either fully or partly our work load. In case of continuous process industry however, it is not feasible to have more intensiveness of use. So also Sub-contracting is ruled out for sophisticated processing. 7. COST BEHAVIOUR IN RELATION TO VOLUME There are 2 types of cost involved Fixed costs (FC) and Variable costs (VC). For a given volume of output, as we increase the output the variable costs do increase, but since the contribution is enough to cover fixed costs we get a lower cost per unit. Break even volume is the volume where no profit or no loss.

Revenue

Total cost

BEP COST PROFIT

Variable cost

LOSS

Fixed cost

Volume-quantity in units

8. ECONOMIES OF SCALE If the output is greater than the optimum output then there are diseconomies of scale as an increase in output rate will increase the average cost per unit If the output is less than the optimum output then there an increase in the output rate will reduce the cost per unit of production
Average unit cost of output
Minimum cost

Economies of scale

Diseconomies Best Operating Level

Rate of output (no of units )

Economies of Scale and the Experience Curve working

Average unit cost of output

100-unit plant 200-unit plant 300-unit plant

Volume

Similarly the larger the production scale the lower is the cost per unit of production. So hence large production units gets the advantage of low cost per unit per product manufactured. INFLUENCES UPON EFFECTIVE CAPACITY Influences upon effective capacity are a) Demand Forecasts Every capacity is dependent on the forecast of the demand of the companys products and preparing reliable forecasts is generally difficult. Many a factors influence the process of forecasting they are (i) PLC (ii) Product phase (iii)Number of products b) Labour efficiency against the output standards Output standards are set by the industrial engineering department considering average operators and normal pace of working. All workers do not meet these standards even if the standards are equitable. The

labour efficiency figure changes from machine to machine and from company to company. c) Plant efficiency Plant efficiency factors considers enforced idle time of the machines because of scheduling delays, machine breakdowns, preventive maintenance etc. plant efficiency factors varies from equipment to equipment and company to company. d) Multiplicity of shifts It implies the number of shifts that the firm should run on each working day. Single shifts increase investment while multiple shifts increase labour and supervision costs. e) Sub contracting It is the process of off-loading some of the firms manufacturing requirements to outside vendors to design peculiar to the firms for economic reasons or to augment existing manufacturing facilities. This decision to sub-contract must be backed systematic and careful cost analysis. f) Management policies (i) Not to invest in machines where subcontracting is possible (ii) To perform critical operations which are liable for rejections at home plant. (iii)to maintain sufficient inventory of spares for the machines to which no substitutes are available

Waiting Lines
Waiting in lines is part of everyday life. Some estimates state that Americans spend 37 billion hours per year waiting in lines. Whether it is waiting in line at a grocery store to buy deli items (by taking a number) or checking out at the cash registers (finding the quickest line), waiting in line at the bank for a teller, or waiting at an amusement park to go on the newest ride, we spend a lot of time waiting.We wait in lines at the movies, campus dining rooms, the Registrars Office for class registration, at the Division of Motor Vehicles, and even at the end of the school term to sell books back. Think about the lines you have waited in just during the past week. How long you wait in line depends on a number of factors. Your wait is a result of the number of people served before you, the number of servers working, and the amount of time it takes to serve each individual customer. Wait time is affected by the design of the waiting line system. A waiting line system (or queuing system) is defined by two elements: the population source of its customers and the process or service system itself. In this supplement we examine the elements of waiting line systems and appropriate performance measures. Performance characteristics are calculated for different waiting line systems. We conclude with descriptions of managerial decisions related to waiting line system design and performance. _Waiting line system Includes the customer population source as well as the process or service system. _ Queuing system Another name to define awaiting line.

ELEMENTS OF WAITING LINES

Any time there is more customer demand for a service than can be provided, a waiting line occurs. Customers can be either humans or inanimate objects. Examples of objects that must wait in lines include a machine waiting for repair, a customer order waiting to be processed, subassemblies in a manufacturing plant (that is, work-inprocess inventory), electronic messages on the Internet, and ships or railcars waiting for unloading. In a waiting line system, managers must decide what level of service to offer. A low level of

service may be inexpensive, at least in the short run, but may incur high costs of customer dissatisfaction, such as lost future business and actual

processing costs of complaints. A high level of service will cost more to provide, and will result in lower dissatisfaction costs. Because of this tradeoff, management must consider what is the optimal level of service to provide. This is illustrated in Figure D-1.

Queuing Costs
$

Total Cost

Cost of providing service Cost of customer dissatisfaction

Service Level

The Customer Population

The customer population can be considered to be finite or infinite. When potential new customers for the waiting line system are affected by the number of customers already in the system, the customer population is finite. For example, if you are in a class with nine other students, the total customer population for meeting with the professor during office hours is ten students. As the students waiting to meet with the professor increases, the population of possible new customers decreases. There is an finite limit as to how large the waiting line can ever be.

When the number of customers waiting in line does not significantly affect the rate at which the population generates new customers, the

customer population is considered infinite. For example, if you are taking a class with 500 other students (a relatively large population) and the probability of all the students trying to meet with the professor at the same time is very low, then the number of students in line does not significantly affect the populations ability to generate new customers. In addition to waiting, a customer has other possible actions. For example, a customer may balk, renege, or jockey. Balking occurs when the customer decides not to enter the waiting line. For example, you see that there are already 12 students waiting to meet with your professor, so you choose to come back later. Reneging occurs when the customer enters the waiting line but leaves before being serviced. For example, you enter the line waiting to meet with your professor, but after waiting 15 minutes and seeing little progress, you decide to leave. Jockeying occurs when a customer changes from one line to another, hoping to reduce the waiting time. A good example of this is picking a line at the grocery store and changing to another line in the hope of being served quicker. The models used in this supplement assume that customers are patient; they do not balk, renege, or jockey; and the customers come from an infinite population. The mathematical formulas become more complex for systems in which customer population must be considered finite, and when customers balk, renege, or jockey. _ Infinite customer population The number of potential new customers is not affected by the number of customers already in the system. _ Balking The customer decides not to enter the waiting line. _ Reneging The customer enters the line but decides to exit before being served. _ Jockeying The customer enters one line and then switches to a different line in an effort to reduce the waiting time.

The Service System

The service system is characterized by the number of waiting lines, the number of servers, the arrangement of the servers, the arrival and service patterns, and the service priority rules. The Number of Waiting Lines:- Waiting line systems can have single or multiple lines. Banks often have a single line for customers. Customers wait in line until a teller is free and then proceed to that tellers position. Other

examples of single-line systems include airline counters, rental car counters, restaurants, amusement park attractions, and call centers. The advantage of using a single line when multiple servers are available is the customers perception of fairness in terms of equitable waits. That is, the customer is not penalized by picking the slow line but is served in a true first-come, firstserved fashion. The single line approach eliminates jockeying behavior. Finally, a single-line, multiple-server system has better performance in terms of waiting times than the same system with a line for each server. The multiple-line configuration is appropriate when specialized servers are used or when space considerations make a single line inconvenient. For example, in a grocery store some registers are express lanes for customers with a small number of items. Using express lines reduces the waiting time for customers making smaller purchases. Examples of single- and multiple-line systems are shown in Figure D-2.

The Number of Servers:- System serving capacity is a function of the number of service facilities and server proficiency. In waiting line systems,

the terms server and channel are used interchangeably. It is assumed that a server or channel can serve one customer at a time. Waiting line systems are either single server (single channel) or multiserver (multichannel). Singleserver examples include small retail stores with a single checkout counter, a theater with a single person selling tickets and controlling admission into the show, or a ballroom with a single person controlling admission. Multiserver systems have parallel service providers offering the same service. Multiserver examples include grocery stores (multiple cashiers), drivethrough banks (multiple drive-through windows), and gas stations (multiple gas pumps).

The Arrangement of the Servers:- Services require a single activity or a series of activities and are identified by the term phase. Refer to Figure D2. In a single-phase system, the service is completed all at once, such as with a bank transaction or a grocery store checkout. In a multiphase system, the service is completed in a series of steps, such as at a fast-food restaurant with ordering, pay, and pick-up windows; or many manufacturing processes. In addition, some waiting line systems have a finite size of the waiting line. Sometimes this happens in multiphase systems. For example, perhaps only two cars can physically fit between the ordering and pay window of a fast-food drive through. Finite size limitations can also occur in single-phase systems, and can be associated either with the physical system (for example, a call center only has a finite number of incoming phone lines) or with customer behavior (if a customer arrives when a certain number of people are already waiting, the customer chooses to not join the line). Arrival and Service Patterns:- Waiting line models require an arrival rate and a service rate. The arrival rate specifies the average number of customers per time period. For example, a system may have ten customers arrive on average each hour. The service rate specifies the average number of customers that can be serviced during a time period. The service rate is the capacity of the service system. If the number of customers you can serve per time period is less than the average number of customers arriving, the waiting line grows infinitely. You never catch up with the demand! It is the variability in arrival and service patterns that causes waiting lines. Lines form when several customers request service at approximately the same time. This surge of customers temporarily overloads the service system and a line develops.Waiting line models that assess the performance of service systems usually assume that customers arrive according to a Poisson probability distribution, and service times are described by an exponential

distribution. The Poisson distribution specifies the probability that a certain number of customers will arrive in a given time period (such as per hour). The exponential distribution describes the service times as the probability that a particular service time will be less than or equal to a given amount of time. _ Arrival rate The average number of customers arriving per time period. _ Service rate The average number of customers that can be served per time period.

Waiting Line Analysis

Waiting line analysis assists managers in determining: How many servers to use Likelihood a customer will have to wait Average time a customer will wait Average number of customers waiting Waiting line space needed Percentage of time all servers are idle

Analysis includes following measures

1. The average number of customers waiting in line and in the system. The number of customers waiting in line can be interpreted in several ways. Short waiting lines can result from relatively constant customer arrivals (no major surges in demand) or by the organization having excess capacity (many cashiers open). On the other hand, long waiting lines can result from poor server efficiency, inadequate system capacity, and/or significant surges in demand. 2. The average time customers spend waiting, and the average time a customer spends in the system. Customers often link long waits to poor quality service. When long waiting times occur, one option may be to change the demand pattern. That is, the company can offer discounts or better service at less busy times of the day or week. For example, a restaurant offers early bird diners a discount so that demand is more level. The discount moves some demand from primetime dining hours to the less desired dining hours. If too much time is spent in the system, customers might perceive the competency of the service provider as poor. For example, the amount of time customers spend in line and in the system at a retail checkout counter can be a result of a new employee not yet proficient at handling the transactions. 3. The system utilization rate. Measuring capacity utilization shows the percentage of time the servers are busy. Managements goal is to have enough servers to assure that waiting is within allowable limits but not too many servers as to be cost inefficient.

Waiting Line Terminology

Queue - a waiting line Channels - number of waiting lines in a queuing system Service phases number of steps in service process Arrival rate (l) - rate at which persons or things arrive (in arrivals per unit of time) Service rate (m) - rate that arrivals are serviced (in arrivals per unit of time) Queue discipline - rule that determines the order in which arrivals are serviced Queue length number of arrivals waiting for service Time in system an arrivals waiting time and service time Utilization degree to which any part of the service system is occupied by an arrival

Waiting Line Nomenclature (Kendall Notation)

Queuing models are classified using a system called Kendall notation. The general format is */*/s, where the first character denotes the assumptions made about the arrival process. M means Poisson, D means deterministic (no randomness), and G means generalno assumptions are necessary about the arrival process. The second character denotes assumptions made about the service process. The last character, s, is the number of channels, or servers in the queuing system. Note that if a queuing system has several channels, it is still assumed that there is only one waiting line, similar to a post office. An M/G/2 queuing model for example, would have Poisson arrivals, no assumptions about the service process, and 2 channels.

Definitions of Queuing System Variables

= Average arrival rate 1/ =Average time between arrivals = Average service rate for each server

1/ = average service time Lq = average number of arrivals waiting in line Ls = average number of arrivals in the system Wq = average time arrivals wait in line Ws = average time arrivals are in the system Ps = probability of exactly n arrivals in the system

Single server waiting line Model Analysis

The easiest waiting line model involves a single-server, single-line, single-phase, system. The following assumptions are made when we model this environment. 1. The customers are patient (no balking, reneging, or jockeying) and come from a population that can be considered infinite. 2. Customer arrivals are described by a Poisson distribution with a mean arrival rate of (lambda). This means that the time between successive customer arrivals follows an exponential distribution with an average of 1/. 3. The customer service rate is described by a Poisson distribution with a mean Service rate of (mu). This means that the service time for one customer follows an exponential distribution with an average of 1/. 4. The waiting line priority rule used is first-come, first-served. Using these assumptions, we can calculate the operating characteristics of a waiting line system using formulas

1. C/C/1 Model
Constant Arrival Rate Constant service rate Single channel Ideal Model

Waiting time in the system is Zero Formulae for C/C/1 model Ps = / Lq = 2 /(- )=0 Ls = / (- )=0 Wq = Lq/ = 0 Ws = Ls/ = 0 Example: Assume a drive-up window at a fast food restaurant. Customers arrive at the rate of 25 per hour. The employee can serve one customer every two minutes. Assume constant arrival and service rates. Determine: A) What is the average utilization of the employee? B) What is the average number of customers in line? C) What is the average number of customers in the system? D) What is the average waiting time in line? E) What is the average waiting time in the system? Solution: What is the average utilization of the employee? =25 cust/hr. = 1 Customer/( 2mins (1hr/60mins)) = 30 cust/hr P= / = 25/30 = 0.8333 B) What is the average number of customers in line?

Lq = 0 C) What is the average number of customers in the system? Ls = 0 D) What is the average waiting time in line? Wq = 0 E) What is the average waiting time in the system? Ws = 0

2. M/C/1 Model
Variable arrival rate Constant service rate Single channel Simpler model Formulae for M/C/1 Model Ps = / Lq = 2 /(- ) Ls = / (- ) Wq = Lq/ Ws = Wq + 1/ Example Assume a drive-up window at a fast food restaurant. Customers arrive at the rate of 25 per hour. The employee can serve one customer every two minutes. Assume constant arrival and service rates. Determine: A) What is the average utilization of the employee?

B) What is the average number of customers in line? C) What is the average number of customers in the system? D) What is the average waiting time in line? E) What is the average waiting time in the system? Solution: What is the average utilization of the employee? =25 cust/hr. = 1 Customer/( 2mins (1hr/60mins)) = 30 cust/hr P= / = 25/30 = 0.8333 B) What is the average number of customers in line? Lq = 2 / 2(-) = 2.08 C) What is the average number of customers in the system? Ls = / 2(-) = 2.5 D) What is the average waiting time in line? Wq = Lq / = 0.083 hrs. Aprox. 5 mins E) What is the average waiting time in the system? Ws = Wq + 1/ = 0.116 hrs. Aprx. 7 mins

3. Model 1 (M/M/1)
Single channel

Single phase Poisson arrival-rate distribution (Variable) Poisson service-rate distribution (variable) Unlimited maximum queue length Examples: Jim Beam pulls stock from his warehouse shelves to fill customer orders. Customer orders arrive at a mean rate of 20 per hour. The arrival rate is Poisson distributed. Each order received by Jim requires an average of two minutes to pull. The service rate is Poisson distributed also. Consider cost of processing is $ 20/hr. and waiting cost to customer worth $ 30/hr. Questions to follow Service Rate Distribution Question: What is Jims mean service rate per hour? Answer: Since Jim can process an order in an average time of 2 minutes (= 2/60 hr.), then the mean service rate =1/(mean service time) = 60/2 =30/hr. Average Customers in Queue Question: What is the average number of orders Jim has waiting to be processed? Answer: The average number of orders waiting in the queue is: Lq = 2/[( - )] =(20)2/[(30)(30-20)]=4/3 or Lq= 1.33 orders

Average Customers in System Question: What is the average number of orders Jim has waiting to be processed in system?

Answer: The average number of orders waiting in the system is: Ls=/ (-) =20/(30-20) Ls =2 orders Average time in Queue Question: What is the average time an order must wait from the time Jim receives the order until it is finished being processed (i.e. its turnaround time)? Answer: The average time an order waits in the line is: Wq= Lq/ = 1.33/20 Wq= 0.0665 aprox. 4 min. Average time in System Question: What is the average time an order must wait in a system? Answer: The average time an order waits in the system is: Ws= Wq + 1/ = 0.0665 + 1/30 Ws= 0.0998 Aprox 6 min Utilization Factor Question: What percentage of the time is Jim processing order? Answer: The percentage of time Jim is processing orders is equivalent to the utilization factor, /. Thus, the percentage of time he is processing orders is: Ps= / = 20/30 Ps=2/3 or 66.67%

Economic Analysis Question: What is the total waiting cost per hour?

Answer: Total waiting cost can be calculated as follows: S=total no. of servers=1 Server cost/hr.= Sc = $ 20 Customer cost= Cc = $ 30 Lq= 1.33 Cost of all servers= Sc x S = $ 20 Cost of all waiting customers= Cc x Lq =30 x 1.33 = $ 39.9 Total Cost per hr= Cost of all Servers + Cost of all Waiting Customers = 20 + 39.9 = $ 59.9

4. M/M/s with finite queue

This model should be used if there is a limit to the number of customers that can be waiting, or if customers will balk if the waiting line is too long.

5. M/M/s with finite (calling) population.

Use this model if there are a relatively small number of potential customers who will ever try to use the system. This produces different results than the standard M/M/s model because if several customers are already tied up in the system, the overall rate at which customers arrive for service will be smaller.

6. M/G/1Model.
This model provides results for a one-channel system with no assumptions necessary about the service process. However, it will be necessary to supply the average service time andthe standard deviation of the service time.

Waiting Line Improvement

After calculating the operating characteristics for a waiting line system, sometimes you need to change the system to alter its performance. Lets look at the type of changes you can make to the different elements of the waiting line system.

1. Customer arrival rates. You can try to change arrival rates in a number of ways. For example, you can provide discounts or run special promotions during the non peak hours to attract customers. 2. Number and type of service facilities. You can either increase or decrease the number of server facilities. For example, a grocery store can easily change the number of cashiers open for business (up to the number of registers available). The grocery increases the number of cashiers open when lines are too long. Another approach is to dedicate specific servers for specific transactions. One example would be to limit the number of items that can be processed at a particular cashier (ten items or less) or to limit a cashier to cash-only transactions. Still another possibility is to install self-service checkout systems. 3. Changing the number of phases. You can use a multiphase system where servers specialize in a portion of the total service rather than needing to know the entire service provided. Since a server has fewer tasks to learn, the individual server proficiency should improve. This goes back to the concept of division of labor. 4. Server efficiency. You can improve server efficiency through process improvements or dedication of additional resources. For example, cashier accuracy and speed is improved through the use of scanners. Service speed can also be increased by dedicating additional resources. For example, if a grocery bagger is added at each cashier station, service speed will be improved and customers will flow through the system more quickly. 5. Changing the priority rule. The priority rule determines who should be served next. There are priority rules other than first-come, first-served. If you want to change priority rules, consider the impact on those customers who will wait longer. 6. Changing the number of lines. Changing to a single-line model from a multi-line model is most appropriate when the company is concerned about fairness for its customers. A single line ensures that customers do not jockey in an attempt to gain an advantage over another customer. Multi-line models easily accommodate specialty servers (express lanes). Once changes are suggested, evaluate their impact on the performance characteristics of the waiting line system. Changes in one area can require changes in other areas. For example, if you achieve a more constant customer arrival rate, you may be able to reduce the number of service facilities.

Conclusion
Waiting line models allow us to estimate system performance .The benefit of calculating operational characteristics is to provide management with information as to whether system changes are needed. Management can change the operational performance of the waiting line system by altering any or all of the following: The The The The The customer arrival rates, number of service facilities, number of phases, server efficiency, priority rule, and number of lines in the system.

Based on proposed changes, management can then evaluate the expected performance of the system.

CASE: The Copy Center Holdup Catherine Blake, the office manager for the College of Business Administration, has received numerous complaints lately from several department chairpersons. In the past few months, the chairpersons have insisted that something be done about the amount of time their administrative assistants waste waiting in line to make copies. Currently the college has two photo copy centers dedicated for small copying jobs; copy center A on the third floor and copy center B on the fourth floor. Both centers are self-serve and have identical processing capabilities. The copying machines are not visible to the administrative assistants from their offices.When copying is required, the administrative assistant goes to the copy room and waits in line to make the necessary copies. Catherines assistant, Brian, was assigned to investigate the problem. Brian reported that, on average, administrative assistants arrive at copy center A at the rate of 10 per hour and at copy center B at the rate of 14 per hour. Each of the copy centers can service 15 jobs per hour. The administrative assistants arrivals essentially follow a Poisson distribution, and the service times are approximated by a negative exponential distribution. Brian has proposed that the two copy centers be combined into a single copy center with either two or three identical copy machines. He estimates that the arrival rate would be 24 per hour. Each machine would still service 15 jobs per hour. Currently, administrative assistants earn an average of $15 per hour. (a) Determine the utilization of each of the copy centers. (b) Determine the average waiting time at each of the copy centers. (c) What is the annual cost of the administrative assistants average waiting time using the current system? (d) Determine the utilization of the combined copy center with two copiers. (e) Determine the average waiting time at the combined copy center. (f) What would be the annual cost of the administrative assistants average waiting time using the combined twocopier setup? (g) What would be the utilization of the combined copycenter with three copiers? (h) What would be the annual cost of the administrative assistants average waiting time using the combined three copier setup? (i) What would you recommend to Catherine?

Capacity Planning as a Performance Tuning Tool Case Study for a Very Large Database Environment
This article discusses the performance and scalability impact due to severe CPU and I/O bottlenecks in a very large database (over 20 terabytes). It describes the methodologies used to collect performance data in a production environment, and explains how to evaluate and analyze the memory, CPU, network, I/O, and Oracle database in a production server by using the following tools: X Solaris Operating Environment (Solaris OE)Standard UNIX tools X Oracle STATSPACK performance evaluation software from ORACLE Corporation. X Trace Normal Form (TNF) X TeamQuest Model software from Team Quest Corporation X VERITAS Tool VxBench from VERITAS Corporation The article is intended for use by intermediate to advanced performance tuning experts, database administrators, and TeamQuest specialists. It assumes that the reader has a basic understanding of performance analysis tools and capacity planning. The article addresses the following topics: -Analysis and High-Level Observations -Resolving CPU and I/O Bottlenecks through Modeling and Capacity Planning  Conclusions  Recommendations  I/O Infrastructure Performance Improvement Methodology  Data Tables

The article discusses the chronological events of what-if analysis using the TeamQuest modeling software to resolve CPU and I/O bottlenecks, for projections of the database server performance and scalability, and to simulate effects of performance tuning. It also provides a detailed analysis of the findings, and discusses the theoretical analyses and solutions. Finally, it provides an in-depth discussion and analysis of the solution, that is, how to resolve the I/O and CPU bottlenecks by balancing the I/O on the existing controllers and adding new controllers. The first part of the article presents the result of performance analysis with respect to the CPU, I/O, and Oracle database using the tools previously stated. The second part, describes the CPU, I/O tuning, and capacity planning methodology, and its results. Finally, the article provides conclusions, recommendations, and the methodology for improving I/O infrastructure performance. The performance analysis, tuning, and capacity planning methods described in this article can be applied to any servers in a production environment. Performance analysis and capacity planning is a continuous effort. When the application or the environment change, as result of a performance optimization for instance, the performance analysis has to be revisited and the capacity planning model recalibrated. For a system that is operating on the upper limit of its capacity, performance optimization is a continuous search for the next resource constraint. The performance analysis methodology starts with an analysis of the top five system resources being utilized during the peak-period and the percentage of utilization associated to each one. In this case study, the I/O controllers and CPUs topped out at roughly 80 percent utilization and the disk drives reached their peak at 70-to-80 percent utilization. Once these thresholds were reached, response times degraded rapidly (depending the workloads, more than one workload may be depicted). Teamquest performance tools were used to provide the performance analysis and capacity planning results. The Teamquest Framework component was installed on the systems to be monitored. This component implements the system workload definitions and collects detailed performance data. The Teamquest View component allows real time and historical analysis of the performance data being collected on any number of systems on the network.