The document summarizes key aspects of service design and waiting line analysis. It discusses the growing service economy and characteristics of services. The service design process involves defining a service concept and package. Tools for design include service blueprints and waiting line models. Waiting line models analyze factors like arrival rates, service times, and number of servers. Having multiple servers can reduce wait times compared to a single server.

1. Chapter 5
SSeerrvviiccee DDeessiiggnn
Beni Asllani
OOppeerraattiioonnss MMaannaaggeemmeenntt -- 66tthh EEddiittiioonn
Roberta Russell & Bernard W. Taylor, III
University of Tennessee at Chattanooga

2. LLeeccttuurree oouuttlliinnee
 Service economy
 Characteristics of services
 Service design process
 Tools for service design
 Waiting line analysis for service
improvement
5-2

3. SSeerrvviiccee EEccoonnoommyy
5-3
Source: U.S. Bureau of Labor Statistics, IBM Almaden Research Center

4. GGDDPP –– EEmmppllooyymmeenntt bbyy sseeccttoorr
5-4

5. CChhaarraacctteerriissttiiccss ooff SSeerrvviicceess
 Services
 acts, deeds, or performances
 Goods
 tangible objects
 Facilitating services
 accompany almost all purchases of goods
 Facilitating goods
 accompany almost all service purchases
5-5

6. CCoonnttiinnuuuumm ffrroomm GGooooddss ttoo SSeerrvviicceess
5-6
Source: Adapted from Earl W. Sasser, R.P. Olsen, and D. Daryl Wyckoff,
Management of Service Operations (Boston: Allyn Bacon, 1978), p.11.

7. Characteristics of Services (cont.)
 Services are
intangible
 Service output is
variable
 Services have higher
customer contact
 Services are
perishable
 Service inseparable
from delivery
 Services tend to be
decentralized and
dispersed
 Services are
consumed more often
than products
 Services can be easily
emulated
5-7

8. Service Design Process
5-8

9. Service Design Process (cont.)
 Service concept
 purpose of a service; it defines target market and
customer experience
 Service package
 mixture of physical items, sensual benefits, and
psychological benefits
 Service specifications
 performance specifications
 design specifications
 delivery specifications
5-9

10. SSeerrvviiccee PPrroocceessss MMaattrriixx
5-10

11. High v. Low Contact Services
5-11
Design
Decision
 Facility
 Convenient to
location
customer
High-Contact Service Low-Contact Service
 Near labor or
transportation source
 Facility
layout
 Must look presentable,
accommodate
customer needs, and
facilitate interaction
with customer
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Compensative
Advantage (New York:McGraw-Hill, 2001), p. 210
 Designed for
efficiency

12. High v. Low Contact Services (cont.)
 Quality control  More variable since customer
is involved in process;
customer expectations and
perceptions of quality may
differ; customer present when
defects occur
5-12
Design
Decision
High-Contact Service Low-Contact Service
 Measured against established
standards; testing and
rework possible to correct
defects
 Capacity  Excess capacity required to
handle peaks in demand
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Compensative
Advantage (New York:McGraw-Hill, 2001), p. 210
 Planned for average
demand

13. High v. Low Contact Services (cont.)
Design Decision High-Contact Service Low-Contact Service
 Worker skills  Must be able to interact
well with customers and
use judgment in decision
making
 Technical skills
 Scheduling  Must accommodate
customer schedule
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Compensative
5-13
Advantage (New York:McGraw-Hill, 2001), p. 210
 Customer
concerned only
with completion
date

14. High v. Low Contact Services (cont.)
 Service
process
 Mostly front-room
activities; service may
change during delivery in
response to customer
5-14
Design
Decision
High-Contact Service Low-Contact
Service
 Mostly back-room
activities;
planned and
executed with
minimal
interference
 Service
package
 Varies with customer; includes
environment as well as actual
service
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Compensative
Advantage (New York:McGraw-Hill, 2001), p. 210
 Fixed, less
extensive

15. TToooollss ffoorr SSeerrvviiccee DDeessiiggnn
 Servicescapes
 space and function
 ambient conditions
 signs, symbols, and
artifacts
 Quantitative techniques
 Service blueprinting
 line of influence
 line of interaction
 line of visibility
 line of support
 Front-office/Back-office
activities
5-15

16. SSeerrvviiccee BBlluueepprriinnttiinngg
5-16

17. SSeerrvviiccee BBlluueepprriinnttiinngg ((CCoonn’’tt))
5-17

18. EElleemmeennttss ooff WWaaiittiinngg LLiinnee AAnnaallyyssiiss
 Operating characteristics
 average values for characteristics that describe
performance of waiting line system
 Queue
 a single waiting line
 Waiting line system
 consists of arrivals, servers, and waiting line
structure
 Calling population
 source of customers; infinite or finite
5-18

19. 5-19

20. EElleemmeennttss ooff
WWaaiittiinngg LLiinnee AAnnaallyyssiiss ((ccoonntt..))
 Arrival rate (λ)
 frequency at which customers arrive at a waiting line
according to a probability distribution, usually Poisson
 Service time (μ)
 time required to serve a customer, usually described by
negative exponential distribution
 Service rate must be shorter than arrival rate (λ < μ)
 Queue discipline
 order in which customers are served
 Infinite queue
 can be of any length; length of a finite queue is limited
5-20

21. EElleemmeennttss ooff
WWaaiittiinngg LLiinnee AAnnaallyyssiiss ((ccoonntt..))
 Channels
 number of
parallel
servers for
servicing
customers
 Phases
 number of
servers in
sequence a
customer
must go
through
5-21

22. OOppeerraattiinngg CChhaarraacctteerriissttiiccss
5-22
 Operating characteristics are assumed to
approach a steady state

23. TTrraaddiittiioonnaall CCoosstt RReellaattiioonnsshhiippss
5-23
 as service improves, cost increases

24. PPssyycchhoollooggyy ooff WWaaiittiinngg
 Waiting rooms
 magazines and
newspapers
 televisions
 Bank of America
 mirrors
 Supermarkets
 magazines
 “impulse purchases”
5-24
 Disney
 costumed characters
 mobile vendors
 accurate wait times
 special passes

25. PPssyycchhoollooggyy ooff WWaaiittiinngg ((ccoonntt..))
 Preferential treatment
 Grocery stores: express lanes for customers with
few purchases
 Airlines/car rental agencies: special cards available
to frequent-users or for an additional fee
 Phone retailers: route calls to more or less
experienced salespeople based on customer’s
sales history
 Critical service providers
 services of police department, fire department, etc.
 waiting is unacceptable; cost is not important
5-25

26. WWaaiittiinngg LLiinnee MMooddeellss
 Single-server model
 simplest, most basic waiting line structure
 Frequent variations (all with Poisson arrival
rate)
 exponential service times
 general (unknown) distribution of service times
 constant service times
 exponential service times with finite queue
 exponential service times with finite calling
population
5-26

27. BBaassiicc SSiinnggllee--SSeerrvveerr MMooddeell
 Assumptions
 Poisson arrival rate
 exponential service
times
 first-come, first-served
queue
discipline
 infinite queue length
 infinite calling
population
 Computations
 λ = mean arrival rate
 μ = mean service rate
 n = number of
customers in line
5-27

28. BBaassiicc SSiinnggllee--SSeerrvveerr MMooddeell ((ccoonntt..))
 probability that no customers
are in queuing system
 probability of n customers in
queuing system
 average number of customers
in queuing system
 average number of customers
in waiting line
5-28
λλ
P = 1 ––
0 ( ) μμ
( λλ ) n λλ n
P = n λλ
∙∙ P( =
0 )( ) 1 ––
μμ μμ
μμ
L =
λλ
μμ –– λλ
Lq =
λλ2
μμ (μμ –– λλ)

29. BBaassiicc SSiinnggllee--SSeerrvveerr MMooddeell ((ccoonntt..))
 average time customer
spends in queuing system
 average time customer
spends waiting in line
 probability that server is busy
and a customer has to wait
(utilization factor)
 probability that server is idle
and customer can be served
5-29
1 L
μμ –– λλ λλ
W = =
λλ
μμ (μμ ––
λλ )
Wq =
λλ
μμ
ρρ =
I = 1 –– ρρ
λλ
μμ
= 1 –– =
P0

30. BBaassiicc SSiinnggllee--SSeerrvveerr MMooddeell EExxaammppllee
5-30

31. BBaassiicc SSiinnggllee--SSeerrvveerr MMooddeell EExxaammppllee
((ccoonntt..))
5-31

32. SSeerrvviiccee IImmpprroovveemmeenntt AAnnaallyyssiiss
 waiting time (8 min.) is too long
 hire assistant for cashier?
increased service rate
 hire another cashier?
reduced arrival rate
 Is improved service worth the cost?
5-32

33. Basic SSiinnggllee--SSeerrvveerr MMooddeell EExxaammppllee::
EExxcceell
5-33

34. AAddvvaanncceedd SSiinnggllee--SSeerrvveerr MMooddeellss
 Constant service times
 occur most often when automated equipment or
machinery performs service
 Finite queue lengths
 occur when there is a physical limitation to length of
waiting line
 Finite calling population
 number of “customers” that can arrive is limited
5-34

35. AAddvvaanncceedd SSiinnggllee--SSeerrvveerr
MMooddeellss ((ccoonntt..))
5-35

36. BBaassiicc MMuullttiippllee--SSeerrvveerr MMooddeell
 single waiting line and service facility with
several independent servers in parallel
 same assumptions as single-server model
 sμ > λ
 s = number of servers
 servers must be able to serve customers faster than
they arrive
5-36

37. BBaassiicc MMuullttiippllee--SSeerrvveerr MMooddeell ((ccoonntt..))
 probability that there are no customers in system
1 λ n 1 λ s sμ
n! μ s! μ sμ - λ ( ) ( )( ) n = s – 1
n = 0
 probability of n customers in system
5-37
1 λ n
s!sn – s μ
1 λ n
n! μ ( ) { ( )P0, for n > s
P0, for n ≤
s
Pn
=
1
P0
= Σ+

38. BBaassiicc MMuullttiippllee--SSeerrvveerr MMooddeell ((ccoonntt..))
 probability that customer must wait
5-38
( ) 1 λλ s sμμ
s! μμ sμμ ––
λλ
Pw =
P0
λλμμ (λλ/μμ)s
λλ
(s –– 1)! (sμμ –– λλ)2
μμ
L =
P0 +
L
λλ
W =
Lq = L ––
λλ
μμ
1 Lq
μμ λλ
Wq = W –– =
ρρ =λλ
sμμ

39. Basic MMuullttiippllee--SSeerrvveerr MMooddeell EExxaammppllee
5-39

40. Basic MMuullttiippllee--SSeerrvveerr MMooddeell EExxaammppllee
((ccoonntt..))
5-40

41. Basic MMuullttiippllee--SSeerrvveerr MMooddeell EExxaammppllee
((ccoonntt..))
5-41

42. Basic MMuullttiippllee--SSeerrvveerr MMooddeell EExxaammppllee
((ccoonntt..))
5-42

43. Basic MMuullttiippllee--SSeerrvveerr MMooddeell EExxaammppllee
((ccoonntt..))
5-43

44. BBaassiicc MMuullttiippllee--SSeerrvveerr MMooddeell
EExxaammppllee ((ccoonntt..))
 To cut wait time, add another service
representative
 now, s = 4
 Therefore:
5-44

45. MMuullttiippllee--SSeerrvveerr WWaaiittiinngg LLiinnee
iinn EExxcceell
5-45

46. CCooppyyrriigghhtt 22000099 JJoohhnn WWiilleeyy && SSoonnss,, IInncc..
AAllll rriigghhttss rreesseerrvveedd.. RReepprroodduuccttiioonn oorr ttrraannssllaattiioonn ooff tthhiiss wwoorrkk bbeeyyoonndd tthhaatt
ppeerrmmiitttteedd iinn sseeccttiioonn 111177 ooff tthhee 11997766 UUnniitteedd SSttaatteess CCooppyyrriigghhtt AAcctt wwiitthhoouutt
eexxpprreessss ppeerrmmiissssiioonn ooff tthhee ccooppyyrriigghhtt oowwnneerr iiss uunnllaawwffuull.. RReeqquueesstt ffoorr ffuurrtthheerr
iinnffoorrmmaattiioonn sshhoouulldd bbee aaddddrreesssseedd ttoo tthhee PPeerrmmiissssiioonn DDeeppaarrttmmeenntt,, JJoohhnn WWiilleeyy &&
SSoonnss,, IInncc.. TThhee ppuurrcchhaasseerr mmaayy mmaakkee bbaacckk--uupp ccooppiieess ffoorr hhiiss/hheerr oowwnn uussee oonnllyy aanndd
nnoott ffoorr ddiissttrriibbuuttiioonn oorr rreessaallee.. TThhee PPuubblliisshheerr aassssuummeess nnoo rreessppoonnssiibbiilliittyy ffoorr
eerrrroorrss,, oommiissssiioonnss,, oorr ddaammaaggeess ccaauusseedd bbyy tthhee uussee ooff tthheessee pprrooggrraammss oorr ffrroomm tthhee
uussee ooff tthhee iinnffoorrmmaattiioonn hheerreeiinn..
5-46