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Queuing Theory

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Introduction
Being in a queue (waiting line) is an inevitable fact of our daily life, such as waiting for checkout at a supermarket, or waiting to make a bank deposit. Queuing theory, started with research by Agner Krarup Erlang, is used to examine the impact of management decisions on these waiting lines (Anderson et.al, 2009). A basic Queuing Model structure consists of three main characteristics, namely behaviour of arrivals, queue discipline, and service mechanism (Hillier and Lieberman, 2001).
In this assignment, New England Foundry’s queuing problem will be solved in Excel, and then, time and cost savings will be identified.
First of all, current and new situation will be analysed in order to demonstrate the queuing model by using Kendall’s Notation (for the current queuing problem, queuing model is M/M/s). After that, arrival rate, queue size, and service rate will be defined, and added-in Excel file (Queuing models.xlsx). The results will be discussed at the end.

Description
New England Foundry (NEF) produces four different types of woodstoves for home use and additional products that are used with these four stoves.
Due to the increase in energy prices, George Mathison president of the company wants to change the layout to increase the production of their bestselling type of Warmglo III.
NEF has several operations in order to produce woodenstoves which are illustrated as a flow diagram in Figure 1.
Current State Analysis
Current layout offers one counter with two personnel, namely Pete and Bob who are able to serve a total of 10 people per hour (5 per hour each), with an average of 4 people from maintenance and 3 people from molding arriving at the counter per hour randomly (4+3=7). An illustration of current layout can be seen in Figure 2.

Figure 1 Flow Diagram

Figure 2 Current State
This layout caused an additional walking time for a personnel to reach the counter from;
Maintenance department: 3 minutes
Moulding department: 1minute
Therefore, it takes a total travel time of 6 mins for the maintenance personnel, and 2 minutes total for molding personnel to walk to and from the related departments.
Characteristics of the current situation; | One Counter | Arrival rate (λ) | 7 | Service rate (µ) | 5 | Number of servers (s) | 2 | Queuing Model | M/M/s |

Assumptions:
Since there is no information about the size of arrivals, we can suppose that there is no limit on people whom both Bob and Pete can serve.
The arrival rate for both the layouts is 4 per hour from maintenance and 3 per hour from the molding department, establishing a Poisson distribution.
The arrival behaviour of the people involves no balking and reneging. This arrival probability distribution can be denoted by M (Markowian).
Queue discipline is FIFO to serve people in a single line.
Since the queue size is not restricted, we can define the length of the queue as it is infinite.
There is just one counter but the number of servers (s) is 2 i.e. Pete and Bob, through a single phase serving system.
Both Bob and Pete can serve 10 people per hour establishing an exponential probability distribution.
The service time probability distribution is denoted by M (Markowian)
As result, the queuing model of current layout is M/M/s.
(See the queuing problem calculations of the current situation in Annex 1).

New State Analysis
After several week observations, George decided to separate the maintenance shop from the pattern shop. This modification provides a number of advantages by bringing changes in the queuing system (see Figure 3); * Walking time for a personnel from maintenance dropped from 3 to 1 minute. Therefore, the total walking time is 2 minutes from and to maintenance department. * The number of people per hour whom Pete and Bob serve increased
(Pete: 7 people/hour, Bob: 6 people/hour)
New layout system can be seen in Figure 3;

Figure 3 New Layout

Pete (molding) and Bob (maintenance) will be solved separately in Excel file, because they now demonstrate separate queuing systems.
Characteristics of the new situation; | Pete (molding) | Bob (maintenance) | Arrival rate (λ) | 3 | 4 | Service rate (µ) | 7 | 6 | Number of servers (s) | 1 | 1 | Queuing Model | M/M/1 | M/M/1 |

Assumptions:
Arrivals are independent and follow a Poisson distribution.
Service times are independent and follow an exponential service time distribution.
Average service rate exceeds average arrival rate.
Since there are two separate counters, both Pete and Bob follow M/M/1 model with single server and single queue.
(See the queuing problem calculations of the new situation for Pete (molding) in Annex 2 and for Bob (maintenance) in Annex 3).

Time Results
One trip: consists of the time spent in the system by a person from one of departments, and the time that person spent to travel between counter and his department.
One trip= Average time in the system + Total travel time
According to current state solutions,
Average time in the system is 0.3922 hours which means 23.53 minutes,
Total travel time is 6 and 2 minutes for people from maintenance and molding respectively.
One trip for,
Maintenance = 23.53 + 6 = 29.53 minutes
Molding = 23.53 + 2 = 25.53 minutes
According to new state solutions,
Average time in the system is 0.5 hours (30 mins) by people from maintenance (Bob) 0.25 hours (15 mins) by people from molding (Pete).
Total travel time is 2 minutes for people both from molding and maintenance. Therefore, one trip for,
Maintenance = 30 + 2 = 32 minutes (This is an increase in time of per trip, 2.47minutes compared with the current layout for maintenance department).
Molding = 15 + 2 = 17 minutes (This is a decrease in time of per trip, 8.53minutes for the moulding department).

Cost Results
Since the maintenance personnel are paid $9.50/hr and the moulding personnel are paid $11.75/hr, the savings at the new facility are calculated as;
Maintenance (Bob):
[(2.47 ÷ 60) * ($9.50)] = $0.39
The loss of 2.47 minutes costs the company 39 cents per trip.
Molding (Pete):
[(8.53 ÷ 60) * ($11.75)] = $1.67
The saving of 8.53 minutes saves the company $1.67 per trip.
Net Saving:
$1.67 - $0.39 = $1.28 per trip. Conclusion
Although the company saves $1.28 per trip per hour by modifying the layout, managers should consider the costs related to build a new layout. For instance, there is need for one more counter and a new space for the second queue and counter.
On the other hand, the new layout eliminates the transportation waste (from 6mins to 2mins) which is an important improvement in terms of Lean manufacturing and productivity.
Therefore, managers should make a breakeven point analysis to find out whether the saving meets the new layout building costs in the short or middle term.

References

Anderson, D. R., Sweeney, D. J., Williams, T. A., and Wisniewski, M. (2009) An Introduction to Management Science: Quantitative Approaches to Decision Making. London: Change Learning

Hillier, F. S. and Lieberman, G. J. (2001) Introduction to Operations Research. New York: McGraw Hill

APPENDICES

Appendix 1: Solution of NEF Current State Queuing Model in Excel

Appendix 2: Solution of NEF New State Queuing Model in Excel for Pete (Molding)

Appendix 3: Solution of NEF New State Queuing Model in Excel for Bob (Maintenance)

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