The Manufacturer's Incentive to Reduce Lead Times (original) (raw)
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Improving Service by Informing Customers About Anticipated Delays
Management Science, 1999
This paper studies alternative ways to manage a multi-server system such as a telephone call center. Three alternatives can be described succinctly by: (i) blocking, (ii) reneging and (iii) balking. The first alternative -blocking -is to have no provision for waiting. The second alternative is to allow waiting, but neither inform customers about anticipated delays nor provide state information to allow arriving customers to predict delays. The second alternative tends to yield higher server utilizations. The first alternative tends to reduce to the second, without the first-come firstserved service discipline, when customers can easily retry, as with automatic redialers in telephone access. The third alternative is to both allow waiting and inform customers about anticipated delays. The third alternative tends to cause balking when all servers are busy (abandonment upon arrival) instead of reneging (abandonment after waiting). Birth-and-death process models are proposed to describe the performance with each alternative. Algorithms are developed to compute the conditional distributions of the time to receive service and the time to renege given each outcome.
Call Centers with Delay Information: Models and Insights
Manufacturing & Service Operations Management, 2011
In this paper, we analyze a call center with impatient customers. We study how informing customers about their anticipated delays affects performance. Customers react by balking upon hearing the delay announcement, and may subsequently renege, particularly if the realized waiting time exceeds the delay that has originally been announced to them. The balking and reneging from such a system are a function of the delay announcement. Modeling the call center as an M/M/s+M queue with endogenized customer reactions to announcements, we analytically characterize performance measures for this model. The analysis allows us to explore the role announcing different percentiles of the waiting time distribution, i.e., announcement coverage, plays on subsequent performance in terms of balking and reneging. Through a numerical study we explore when informing customers about delays is beneficial, and what the optimal coverage should be in these announcements. It is shown how managers of a call center with delay announcements can control the tradeoff between balking and reneging, through their choice of announcements to be made.
An Alternative Measure for Evaluating the Delay
Journal of the Chinese Institute of Industrial Engineers, 2002
Queues that involve waiting as a model for analyzing the possible delay have been studied for past several decades. The average total time spent in the system and the average total time spent in queue are two of the most fundamental quantities describing a queueing system's behavior. In addition, there are other important factors that will affect the delay as well. For example, the environment in which queue waiting occurs plays a fundamental role in a customer's perceived and/or actual cost of participating in that system. In this paper, we study a queueing model that takes the waiting environment into account. We present a very simple solution procedure to solve the steady-state probability in this model with the required measurement.
Call Center Delay Announcement Using a Newsvendor-Like Performance Criterion
Production and Operations Management, 2014
T he problem of estimating delays experienced by customers with different priorities, and the determination of the appropriate delay announcement to these customers, in a multi-class call center with time varying parameters, abandonments, and retrials is considered. The system is approximately modeled as an M(t)/M/s(t) queue with priorities, thus ignoring some of the real features like abandonments and retrials. Two delay estimators are proposed and tested in a series of simulation experiments. Making use of actual state-dependent waiting time data from this call center, the delay announcements from the estimated delay distributions that minimize a newsvendor-like cost function are considered. The performance of these announcements is also compared to announcing the mean delay. We find that an Erlang distributionbased estimator performs well for a range of different under-announcement penalty to over-announcement penalty ratios.
How Do Delay Announcements Shape Customer Behavior? An Empirical Study
Management Science, 2016
In this paper, we explore the impact of delay announcements using an empirical approach by analyzing the data from a medium-sized call center. We first explore the question of whether delay announcements impact customers' behavior using a nonparametric approach. The answer to this question appears to be ambiguous. We thus turn to investigate the fundamental mechanism by which delay announcements impact customer behavior, by constructing a dynamic structural model. In contrast to the implicit assumption made in the literature that announcements do not directly impact customers' waiting costs, our key insights show that delay announcements not only impact customers' beliefs about the system, but also directly impact customers' waiting costs. In particular, customers' per unit waiting cost decreases with the offered waiting times associated with the announcements. The results of our counterfactual analysis show that it may not be necessary to provide announcements with very fine granularity.*
Real‐time delay announcement under competition
Production and Operations Management
Internet-based technology enables firms to disseminate real-time delay information to delay-sensitive customers. We study how such delay announcements impact service providers in a competitive environment with two service providers who compete for market share. We model the service providers' strategies based on an endogenous timing game, investigating strategies that emerge in equilibrium. We determine the service providers' market shares under the various game outcomes by analyzing continuoustime Markov chains, which capture customers' joining decisions, and by developing a novel computational technique to analyze the intractable asymmetric Join-the-Shortest Queue system, providing bounds on the market shares. We find that only the lower capacity service provider announces its real-time delay under intermediate system loads and highly imbalanced capacities. However, for most parameter settings, the mere presence of a competitor induces both providers to announce delays in equilibrium, leaving customers better off on average. We relate our findings to the single-provider delay announcement literature by discussing the impact of competition on service providers, delay announcement technology firms, and customers.
Analysis and Comparison of Queues with Different Levels of Delay Information
Management Science, 2007
Information about delays can enhance service quality in many industries. Delay information can take many forms, with different degrees of precision. Different levels of information have different effects on customers and so on the overall system. The goal of this research is to explore these effects. We first consider a queue with balking under three levels of delay information: No information, partial information (the system occupancy) and full information (the exact waiting time). We assume Poisson arrivals, independent, exponential service times, and a single server. Customers decide whether to stay or balk based on their expected waiting costs, conditional on the information provided. By comparing the three systems, we identify some important cases where more accurate delay information improves performance. In other cases, however, information can actually hurt the provider or the customers.
Managing Information in Queues: The Impact of Giving Delayed Information to Customers
2016
Delay or queue length information has the potential to influence the decision of a customer to use a service system. Thus, it is imperative for service system managers to understand how the information that they provide will affect the performance of the system. To this end, we construct and analyze two two-dimensional deterministic fluid models that incorporate customer choice behavior based on delayed queue length information. In the first fluid model, customers join each queue according to a Multinomial Logit Model, however, the queue length information the customer receives is delayed by a constant Delta\DeltaDelta. We show that the delay can cause oscillations or asynchronous behavior in the model based on the value of Delta\DeltaDelta. In the second model, customers receive information about the queue length through a moving average of the queue length. Although it has been shown empirically that giving patients moving average information causes oscillations and asynchronous behavior to occur...
Effect of Notifying Expected Waiting Time on Telephone System Performance
2014
In a telephone system, the notification of expected waiting time brings valuable information to the callers so that they can make timely decision on whether to keep waiting or call back later. In this study, we investigate how the realization of this scheme affects the performance of a VA (Veteran Affairs) telephone system. In the proposed scheme, the callers are notified before joining the queue regarding the expected waiting time for the telephone service. A formula based on the number of callers currently in the system is used for providing the approximate expected waiting time. Four scenarios are formed based on different levels of exogenous patience time before abandoning the call and presence of advanced notification scheme. The investigation is carried out using discrete event simulation analysis. The results indicate that the effect of such notification scheme is scenario dependent, in which the patience level of callers plays a significant role on determining the potential ...
2020
Many service systems use technology to notify customers about their expected waiting times or queue lengths via delay announcements. However, in many cases, either the information might be delayed or customers might require time to travel to the queue of their choice, thus causing a lag in information. In this paper, we construct a neutral delay differential equation model for the queue length process and explore the use of velocity information in our delay announcement. Our results illustrate that using velocity information can have either a beneficial or detrimental impact on the system. Thus, it is important to understand how much velocity information a manager should use. In some parameter settings, we show that velocity information can eliminate oscillations created by delays in information. We derive a fixed point equation for determining the optimal amount of velocity information that should be used and find closed-form upper and lower bounds on its value. When the oscillatio...