Chapter Service Design Operations Operations Management Management 66thth Edition Edition Roberta Russell & Bernard W Taylor, III Copyright 2009 John Wiley & Sons, Inc Beni Asllani University of Tennessee at Chattanooga Lecture Outline      Service Economy Characteristics of Services Service Design Process Tools for Service Design Waiting Line Analysis for Improvement Service Copyright 2009 John Wiley & Sons, Inc 5-2 Service Economy Source: U.S Bureau of Labor Statistics, IBM Almaden Research Center Copyright 2009 John Wiley & Sons, Inc 5-3 Copyright 2009 John Wiley & Sons, Inc 5-4 Characteristics of Services  Services  acts, deeds, or performances  Goods  tangible objects  Facilitating services  accompany almost all purchases of goods  Facilitating goods  accompany almost all service purchases Copyright 2009 John Wiley & Sons, Inc 5-5 Continuum from Goods to Services Source: Adapted from Earl W Sasser, R.P Olsen, and D Daryl Wyckoff, Management of Service Operations (Boston: Allyn Bacon, 1978), p.11 Copyright 2009 John Wiley & Sons, Inc 5-6 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 Copyright 2009 John Wiley & Sons, Inc 5-7 Service Design Process Copyright 2009 John Wiley & Sons, Inc 5-8 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 Copyright 2009 John Wiley & Sons, Inc 5-9 Service Process Matrix Copyright 2009 John Wiley & Sons, Inc 5-10 Service Improvement Analysis  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? Copyright 2009 John Wiley & Sons, Inc 5-32 Basic Single-Server Model Example: Excel Copyright 2009 John Wiley & Sons, Inc 5-33 Advanced Single-Server Models  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 Copyright 2009 John Wiley & Sons, Inc 5-34 Advanced Single-Server Models (cont.) Copyright 2009 John Wiley & Sons, Inc 5-35 Basic Multiple-Server Model  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 Copyright 2009 John Wiley & Sons, Inc 5-36 Basic Multiple-Server Model (cont.)  probability that there are no customers in system P0 = n = s – 1 λ n λ s sμ ∑ n= n! ( ) + ( )( ) μ s! μ sμ - λ  probability of n customers in system λ n P0, for n > s n–s s!s μ Pn = λ n P0, for n ≤ s n! μ { () () Copyright 2009 John Wiley & Sons, Inc 5-37 Basic Multiple-Server Model (cont.)  probability that customer must wait Pw = L= W= s! λ s () μ sμ P0 sμ – λ λμ (λ/μ)s (s – 1)! (sμ – λ)2 L λ λ P0 + Lq = L – μ Wq = W – ρ= Copyright 2009 John Wiley & Sons, Inc λ μ μ = Lq λ λ sμ 5-38 Basic Multiple-Server Model Example Copyright 2009 John Wiley & Sons, Inc 5-39 Basic Multiple-Server Model Example (cont.) Copyright 2009 John Wiley & Sons, Inc 5-40 Basic Multiple-Server Model Example (cont.) Copyright 2009 John Wiley & Sons, Inc 5-41 Basic Multiple-Server Model Example (cont.) Copyright 2009 John Wiley & Sons, Inc 5-42 Basic Multiple-Server Model Example (cont.) Copyright 2009 John Wiley & Sons, Inc 5-43 Basic Multiple-Server Model Example (cont.)  To cut wait time, add another service representative  now, s =  Therefore: Copyright 2009 John Wiley & Sons, Inc 5-44 Multiple-Server Waiting Line in Excel Copyright 2009 John Wiley & Sons, Inc 5-45 Copyright 2009 John Wiley & Sons, Inc All rights reserved Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful Request for further information should be addressed to the Permission Department, John Wiley & Sons, Inc The purchaser may make back-up copies for his/her own use only and not for distribution or resale The Publisher assumes no responsibility for errors, omissions, or damages caused the use of these programs 5-46 Copyright 2009by John Wiley & Sons, Inc ... Excess capacity required to handle peaks in demand  Planned for average demand Source: Adapted from R Chase, N Aquilano, and R Jacobs, Operations Management for Compensative Advantage (New York:McGraw-Hill,... standards; testing expectations and perceptions of quality and rework possible may differ; customer to correct defects present when defects occur  Capacity  Excess capacity required to handle... for accommodate efficiency customer needs, and facilitate interaction with customer Source: Adapted from R Chase, N Aquilano, and R Jacobs, Operations Management for Compensative Advantage (New