Strategic Decision Making Using Waiting Line Models

Abstract

This article considers issues facing management and their decision processes to deal with them effectively. The first develops an optimal strategy for leasing equipment in which there are three available management options, the criterion being to minimize the total cost of use. The first option is to stay with the status quo, the second to lease faster equipment, and the third to lease multiple pieces of equipment. Two scenarios are discussed, one where the waiting time in the queue is taken into account while the other includes the time spent using the equipment itself. A second problem deals with the sharing of resources and optimal configurations, using first a mathematical solution and then a discussion of the practicalities of implementation. The final case involves the optimal times to employ a faster server as a function of how busy the queueing system is.