MODY UNIVERSITY

(COBMEC)
QUANTITATIVE TECHNIQUES OF MANAGERIAL APPLICATIONS

CASE STUDY FOR BANK ATM QUEUING MODEL

SUBMITTED TO : SUBMITTED BY :
PRIYAL SARRAF
DR. PRIYANKA JAIN PURVI SHARMA
MANISHA JOSHI
JALPA MADEKA
AISHA KUKHRANIA
AARTI PAWAR
 WHAT IS QUEUE?
Queue is a word that means a waiting line or the act of joining a line
Queuing is the common activity of customers or people to avail the
desired service, which could be processed or distributed one at a time
Queuing theory was proposed by A.K. Erlang
It optimizes the number of service facilities and adjusts the times of
services
 QUEUING THEORY
The beginning of the study of queuing theory was in the year 1908
when Copenhagen Telephone Company requested Agner K. Erlang to
work on the holding times in a telephone switch.
He identified that the number of telephone conversations and
telephone holding time fit into Poisson distribution and exponentially
distributed.
There are two common concepts of queuing theory used in this case
study to solve Bank ATM problems:

Littles Theorem
M/M/1 Queuing Model or ATM Model
 INTRODUCTION
This case study is about BRAC BANK ATM, at Chittagong city,
Bangladesh
Bank provides one ATM in every branch, but one ATM would not
serve a purpose of all customers and they shift to other bank ATM
So Bank ATM would try to avoid losing their customers due to long
wait on the line by improving their service time
In ATM, bank customers arrive randomly and the service time is also
random
The capacity of the queue is can be limited or unlimited. Bank is an
example of unlimited queue length
 QUEUING SYSTEM
A queuing system can be described by :
1. The input or arrival pattern
2. The service mechanisms
3. The queue discipline
4. Customers behavior
QUEUING SYSTEM (CONTD)
A queuing system consists of one or more servers that
provide service to arriving customers

Arrivals Service
Exit
Station
Queues
 Queuing Model
Q

Where,
is arrival rate the average rate at which customer arrives
S is service time the average time required to service one customer
W is the average number of customer waiting
Q is the total number of customer in the system
 LITTLES THEOREM
It describes the relationship between arrival and service rate or
number of customers and jobs in the system
The theorem states that expected number of customers (N) for a
system in steady state is determined by the equation
N = T
Where is the arrival rate and T is the service time for a customer
It describes three fundamental relationships
N increases if or T increases
increases if N increases or T decreases
T increases if N increases or decreases
M/M/1 MODEL (ATM MODEL)
OBSERVATION & DISCUSSION

Researcher has collected the one month daily

customer data by observation during banking time, as
shown in Table.
 Table : Monthly Customer Counts

Weekend
Weekend Weekdays
Week
Saturday Sunday Monday Tuesday Wednesday Thursday Friday

1st 70 191 161 120 130 111 95

2nd 75 154 151 110 93 75 80

3rd 65 140 135 121 100 128 77

4th 50 115 102 92 85 80 78

Total 260 600 549 443 408 394 370



Figure : One month daily customer counts

Figure: One month total customer counts
 CALCULATIONS
It is observed that, after Saturday, during first two days of a
week, there are on average 60 people coming to the ATM in an
hour time period of banking time.
From this we can derive the arrival rate as:

= 60/60 = 1customers/minute (cpm )

 It is also observed (with ATM guard) that each customer
spends 2 minutes on average in the ATM (W), the queue
length is around 3 people (Lq) on average and the average
waiting time is around 2.5 minutes i.e. 150 seconds.
Theoretically, the average waiting time is,
Wq = Lq / = 3customers = 3minutes = 180 seconds
1cpm
Here, we can see that, the observed actual waiting time does
not differ by much when it is compared with the theoretical
waiting time.
 Next, we will calculate the average number of people in the
ATM,
L = 1 cpm x 2minutes = 2 customers
Having calculated the average number of customers in the ATM,
we can also derive the service rate and the utilization rate ,
= (1+L) = 1(1+2) = 1.5cpm
L 2
Hence, P = = 1cpm = 0.70
1.5cpm
With the very high utilization rate of 0.70 during banking time,
the probability of zero customers in the ATM is very small,
Po = 1 - p =1 - 0.70 = 0.30
 The queuing theory provides the formula to calculate the
probability of having n customers in the ATM as follows:
p n = (1- p) p n = (1 0.70) (0.70) n = (0.30) (0.70) n
EVALUATION
The utilization is directly proportional with the mean
number of customers
The utilization rate is very high during banking time
on weekends and it is half of it on week days
The customers waiting time will decrease if the
number of customers that are able to be served per
minute increases
When the service rate is higher the utilization will be
lower, which makes the probability of the customers
going away decreases
BENEFITS
This research helps the bank ATM to increase its QOS
(Quality of service), if there are many customers in
the queue
This research may help to analyze the current system
and improve the next system
By estimating the number of customers coming and
going in a day, the Bank can set a target that, how
many ATMs are required to serve people in the main
branch or any other branch of the Bank
 CONCLUSION
This research has discussed the application of queuing theory to
the bank ATM
From the result we obtained that, the rate at which customers
arrive in the system is 1 cpm and the service rate is 1.5 cpm
The probability of buffer overflow is the probability that
customers will run away, because may be they are impatient to
wait in the queue
This theory is applicable to the Bank, if they want to calculate all
the data daily and can be applied to all branch ATM
The problem that were faced in completion of this research were
the inaccuracy of result because some data used was just based
on assumptions
This research can contribute in the better functioning of Bank
ATM