Donna Shader, manager of the Winter Park Hotel, is considering how to restructur
ID: 466292 • Letter: D
Question
Donna Shader, manager of the Winter Park Hotel, is considering how to restructure the front desk to reach an optimum level of staff efficiency and guest service. At present, the hotel has five clerks on duty, each with a separate waiting line, during the peak check-in time of 3:00 pm. To 5:00 pm. Observation of arrivals during this time shows that an average of 90 guests arrive each hour (although there is no upward limit on the number that could arrive at any given time). It takes an average of 3 minutes for each front-desk clerk to register each guest.
Donna is considering three plans for improving guest service by reducing the length of time guests spend waiting in line. The first proposal would designate one employee as a quick-service clerk for guests registering under corporate accounts, a market segment that fills about 30% of all occupied rooms. Because corporate guests are preregistered, their registration takes just 2 minutes. With these guests separated from the rest of the clientele, the average time for registering a typical guest would climb to 3.4 minutes. Under Plan 1, noncorporate guests would choose any of the remaining four lines.
The second plan is to implement a single-line system. All guests could form a single waiting line to be served by whichever of five clerks became available. This option would require sufficient lobby space for what could be a substantial queue.
The third proposal involves using an automatic teller machine (ATM) for check-ins. This ATM would provide approximately the same service rate as a clerk would. Given that initial use of this technology might be minimal, Shader estimates that 20% of customers, primarily frequent guests, would be willing to use the machines. (This might be a conservative estimate if the guests perceive direct benefits from using the ATM, as bank customers do. Citibank reports that some 95% of its Manhattan customers use its ATMs.) Donna would set up a single queue for customers who prefer human check-in clerks. This would be served by the five clerks, although Donna is hopeful that the machine will allow a reduction to four.
The current system at the hotel has a separate line for each clerk. Can you think of another business where you have seen this configuration?
1. One proposal under consideration is using a single line and having the first available clerk serve the next customer. Have you ever seen a business that uses this configuration? What are the advantages and disadvantages of the having all five clerks serve one line versus having each clerk serve his/her own line?
2. If there are 5 clerks, and the average time to serve each customer is 3 minutes, then how many customers can be served each hour? How many customers arrive per hour?
3. What are some sources of variability in the current check-in system? In other words, why might the check-in time be more or less than 3 minutes? Why might there be more or fewer than 90 customers arrive in a given hour? In light of these factors, reconsider your answer to question 3 above.
4. Which of the proposed changes to the check-in system would work the best? What are some other ways that the check-in process capacity could be increased?
Explanation / Answer
1. The current system at the hotel has a separate line for each clerk. Can you think of another business where you have seen this configuration?
Similar system is used in railway or airline ticket booking; even I ticket booking counters in multiplexes.
2. One proposal under consideration is using a single line and having the first available clerk serve the next customer. Have you ever seen a business that uses this configuration? What are the advantages and disadvantages of the having all five clerks serve one line versus having each clerk serve his/her own line?
An example of business that has active servers, that is one queue being served by multiple servers, is government licence renewal offices, where the customers are given numbers and they are called as per the numbers provided when a server gets free. The same system is also followed in certain mobile and laptop service centres, where the customer is given numbers, and servers serve those customers based on their arrival sequence, once they get free.
This model of having all 5 clerks serve a single queue offers the system with less variability, as all the customers generally use the length of the line or the number of people in the line as a heuristic to identify which line to join. The shortest line necessarily does not offer the shortest waiting period, as there are many other factors involved, like the service time taken by that particular server maybe longer than the other servers. Also, since the customer feels they are being treated fairly, single line for multiple servers, eliminate the jockeying behaviour of customers from line to another. The drawback of this system is that single lie system needs more space hence, larger infrastructure.
3. If there are 5 clerks, and the average time to serve each customer is 3 minutes, then how many customers can be served each hour? How many customers arrive per hour?
no of clerks
5
Arrival rate
90
guests/hr
service time
3
min/guest
individual service rate
20
guests/hr
(=60 min/ 3)
total service rate
100
guests/hr
(=20 *5 workstations)
Hence, the number of customers arriving per hour is 90, and the 100 customers can be served each hour with the service time of 3 minutes/customer.
4. What are some sources of variability in the current check-in system? In other words, why might the check-in time be more or less than 3 minutes? Why might there be more or fewer than 90 customers arrive in a given hour? In light of these factors, reconsider your answer to question 3 above.
Variability in the arrival and service rates are the main causes of waiting lines in the model. Otherwise if the number of customers being serviced per hour is more than the number of customers arriving per hour, there will not be any waiting lines. In the waiting line models we assume that the customers’ arrival is as per Poisson distribution, i.e. we get a probability that a certain number of customers are going to arrive in the given time period like an hour in this case. Whereas, the service times are assumed to follow an exponential distribution, i.e., the probability that a certain service time is less than or equal to a given amount of time. Hence, variability in actual arrival rate and actual service times might be a source of variability in the current check in system. Arrival rates can change if there is a discount or offer in certain hours, etc.
For example in plan 3, the Arrival rate has changed due to the use of ATM machine fr 20% of customers:
Plan 3
ATM line arrival rate
18
guests/hr
(=20% of 90)
ATM line service rate
20
guests/hr
Human lines arrival rate
72
guests/hr
(=80 of 90)
human lines service rate
100
guests/hr
(5 lines)
Hence in question 3 above, the arrival and service rates of a particular hour might change, and hence the customers arriving that hour might be less or more than 90 customers/ hour, and the service times might change due to the speed of the clerk, and the number of customers being serviced in that hour might be less than 100, or more than 100 in case the server shows higher efficiency.
no of clerks
5
Arrival rate
90
guests/hr
service time
3
min/guest
individual service rate
20
guests/hr
(=60 min/ 3)
total service rate
100
guests/hr
(=20 *5 workstations)
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