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INSIGHTS ON SERVICE SYSTEM DESIGN FROM A NORMAL APPROXIMATION TO ERLANG'S DELAY FORMULA
Author(s) -
KOLESAR PETER J.,
GREEN LINDA V.
Publication year - 1998
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/j.1937-5956.1998.tb00457.x
Subject(s) - server , computer science , erlang (programming language) , staffing , queue , queueing theory , service (business) , percentile , mathematical optimization , computer network , mathematics , theoretical computer science , statistics , functional programming , economy , management , economics
We show how a simple normal approximation to Erlang's delay formula can be used to analyze capacity and staffing problems in service systems that can be modeled as M/M/s queues. The numbers of servers, s , needed in an M/M/s queueing system to assure a probability of delay of, at most, p can be well approximated by s ≅ p + z ***I‐ p +, where z 1‐ p , is the (1 ‐ p )th percentile of the standard normal distribution and ρ, the presented load on the system, is the ratio of Λ, the customer arrival rate, to μ, the service rate. We examine the accuracy of this approximation over a set of parameters typical of service operations ranging from police patrol, through telemarketing to automatic teller machines, and we demonstrate that it tends to slightly underestimate the number of servers actually needed to hit the delay probability target—adding one server to the number suggested by the above formula typically gives the exact result. More importantly, the structure of the approximation promotes operational insight by explicitly linking the number of servers with server utilization and the customer service level. Using a scenario based on an actual teleservicing operation, we show how operations managers and designers can quickly obtain insights about the trade‐offs between system size, system utilization and customer service. We argue that this little used approach deserves a prominent role in the operations analyst's and operations manager's toolbags.