Project 2: ATM’s & Queues

ATM’s & Queues

 Certain business situations require customers
to wait in line for a service

 Examples:
 Waiting to use an ATM machine
 Paying for groceries at the supermarket

 A line of people or objects is called a “queue”

ATM’s & Queues
 Queues occur in many places:

 Running multiple programs on a computer

 A print queue is formed when many documents are
sent to the printer
 Telephone calls on a switchboard
 Vehicles waiting at a traffic light
ATM’s & Queues
 Studying how these lines form and how to manage
them is called Queuing Theory

 Queuing Theory has become an important tool in

business decisions regarding quality and expense of
customer service

 Example: Supermarket manager sees checkout lines are too

long, so more cashiers are called to work the registers, but
this costs more money
ATM’s & Queues
 Automated services make queue theory
important when direct monitoring of service
isn’t possible
 Example:
 Bank manager can’t monitor ATM machine service at
mid-night.
 Opening up more machines might improve customer
service but may cost a lot of money
ATM’s & Queues
 Managing queues is a balancing act:

Customer $$$$$$$$$
Satisfaction $$$$$$$$$
ATM’s & Queues
 Two Queue Models

 Standard Queue

 Serpentine Queue
ATM’s & Queues
 Standard Queue

 Customers select what they believe to be the shortest

or most rapidly moving line from individual queues at
several stations.
 This model is used at most supermarkets.
ATM’s & Queues
 Serpentine Model

 Customers form a single

line, and advance to the
front to get their
service.
 Used at most airline
ticket counters and in
many post offices
ATM’s & Queues
 Analyzing how to manage queues often uses
computer simulation

 Two types of Simulation

 Monte Carlo

 Bootstrapping
ATM’s & Queues
 Monte Carlo Simulation

 Sample data is used to estimate the actual

probability distribution of some random variable.

 This theoretical distribution is then used to

generate new samples.
ATM’s & Queuing
 Bootstrapping

 When the data does not indicate any known

theoretical probability distribution, we can
simulate new data by random sampling from the
original data
ATM’s & Queues
 Class Project

 The People’s Bank has 3 ATM’s

 At least one ATM is available 24 hours a day 7
days a week
 Bank manager has records of ATM usage and
customer service times for 5 weeks
ATM’s & Queues
 Mean numbers of customers arriving for ATM
usage during every hour of the week is
contained in Queue Data.xls.
 The complete arrival data for the 9:00 a.m. and
9:00 p.m. hours on Fridays are shown in that
file as well.
 These hours happen to be the bank’s busiest
days of service.
ATM’s & Queues
 We will study the queues for the ATM’s during:
 The 9:00am hour on Friday
 The 9:00pm hour on Friday

 The starting and ending times of ATM service were

recorded for each arriving customer.
 Data for these service times during the first week of
record keeping are shown in Queue Data.xls.
ATM’s & Queues
 Bank manager wants to avoid long wait times, long
queue lengths, and do this using the least number of
ATM’s

 The bank manager would like to know what level of

service to provide for managing the queues based on:

 Services Times for individual customers

 The number of customers waiting to be served
ATM’s & Queues
 Terms:
 Wait Time (in min): The period of time that a customer must
wait between arrival and the start of his or her access to an
ATM
 Delayed: A person who must wait more than 5 minutes
 Number in Queue: the number of people in line waiting
before an arriving customer can reach an ATM
 Irritated: queue length is more than 3 customers
 Total Present: the total number of patrons present in the
queue
ATM’s & Queues
 The bank manager is looking at three
advertising claims for service times:
 (Mean Wait Claim) The mean waiting time is at
most 1 minute.
 (Maximum Wait Claim) No one will wait more than
12 minutes.
 (Percent Delayed Claim) At most 5% of the
customers will be delayed (wait more than 5
minutes)
ATM’s & Queues
 The bank manager is also looking at three advertising
claims for the number of customers waiting in line:
 (Mean Queue Claim) The mean number of people in the
queue will not exceed 8.
 (Percent Irritated Claim) At most 2% of the customers will be
irritated (find more than 3 people in line or waiting to be
served).
 (Maximum Present Claim) The total number present will
never exceed 10.
ATM’s & Queues
 Project Assumptions:
 No one is using an ATM or waiting for a machine at
the start of the hour.

 Service times for each ATM have the same

distribution as sampled in Week 1 Service Times in
the sheet Data of Queue Data.xls.
ATM’s & Queues
 Project Assumptions (cont)
 The time until the first arrival and the times
between arrivals of customers have the same
distribution.
 In the standard queuing model, if more than one
ATM is open, arriving customers enter the shortest
of the existing queues. If two or more queues are
the same length, a customer selects a queue at
random.
ATM’s & Queues
 Objectives:

 Based only on 9 a.m. hour on Fridays, how many ATM’s should be

opened and what queuing model should be used to validate each
advertising claim during 9-10 a.m. period?
 Based only on 9 p.m. hour on Fridays, how many ATM’s should be
opened and what queuing model should be used to validate each
advertising claim during 9-10 p.m. period?

NOTE: We only consider the use of a serpentine model when three

ATM’s are in use
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 Objectives (cont)

 Finding the hourly cost of a gift certificate program for 3

ATM’s Serpentine:

 If a serpentine queue is used, customers don’t physically

stand in a line because the bank currently uses a number
dispenser and service indicator that gives customers slips of
paper indicating their position in the queue.
ATM’s & Queues
 Objectives (cont)

 Finding the cost of gift certificate program (cont)

 Bank is considering updating to a system that stamps the

arrival time of a customer which could be used to document
a customer’s wait time

 The hourly cost for such an upgrade (maintenance,

purchase price, etc.) is $20
ATM’s & Queues
 Objectives

 Finding the cost of the gift certificate program (cont)

 A $25 gift to any customer who is delayed (waits more than

5 minutes).

 What is the expected hourly cost of such a plan? How

would this change if it is estimated that only 60% of eligible
customers would decide to claim the gift?
ATM’s & Queues
 Team Data will be posted on class web page

 Data includes

 historical records of ATM service times and customer arrival times

for two hours out of each week

 Parameters for six potential advertising strategies.

 Mean Wait Claim
 Maximum Wait Claim
 Percent Delayed Claim
 Mean Queue Claim
 Percent Irritated Claim
 Maximum Present Claim
ATM’s & Queues
Team Data will be posted after Spring Break

Team Preliminary Report

 Date: Monday March 31st, 2008