Introduction to Operations Management - I

Prof. B Mahadevan
Analyzing Capacity in Operations
Week 02 C07_A

We have seen a few examples of capacity estimation and process design so far. If you recall,
in all these examples, we have made one implicit assumption about the demand and
process times. We simply assumed that these information are known, deterministic and
does not change. That's an assumption that we made. However, as we all know, in reality,
both these information tend to be varying and quite uncertain. One cannot say that demand
materializes exactly every five minutes in an operational system and things of that kind. So,
the question naturally is how will this impact the capacity? Because all our analysis has been
on deterministic process times and deterministic demand or let us say arrival . . . into the
system.
If you go to a bank, sometimes we find that the cue gets longer as more customers arrive
than the normal. We all have this experience with us. Customer assistant on the other side
takes varying time to serve each customer. It's not exactly five minutes per customer. For
some customer it can be you know eight nine minutes. Maybe some other cuscustomer it
could be just about two three minutes. It may average at five. So therefore, simplifying this
situation into a very nice average demand of say 10 per hour, or an average process time of
let's say five minutes, or servicing 12 per hour may not really tell us much about the reality.
So given this uncertainty, this way of analysis can be misleading, may not cover the whole
issue completely. So when we analyze capacity, somehow we need to bring all this
information into our analysis. So, we have a body of knowledge called cueing theory or
waiting line models which actually provides a structured approach to address capacity issues
under these kinds of conditions.
So, what we have here is a simple representation of any cueing system. We have a lot of
real-life systems. Arrivals come from a population. What you mean by that is . . . there is a
supermarket or there is a health diagnostic centre which we saw. People from the
neighbourhood will arrive. So they constitute the population from which arrivals come and
as arrivals come they enter into the system. So this . . . nice box that I have drawn here is to
represent the, we are entering into an operation system aat the moment there is a single
server. We are looking at only one server at this point in time. So there's a single server. So
as people arrive, if somebody is already getting service you need to obviously wait. So you
have all these customers waiting here. So that is a waiting line which develops. Since it is a
single server, one person at a time makes use of the server and then after the processing is
done, they are out of the system. So this represents generically a simple single-server cueing
system.

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