The Significance of Waiting Line Costs

Differences exist between product providing systems and service providing systems. This is particularly through the ways in which buffer procedures are created by manufacturers for the processes. In either case, inventories are used to create buffers from the customers. In systems involved in pure services, and particularly those in which the services are received directly from the service providers, there has to be a boundary between the customers and the service providers. This is especially true where there is increased demand for services way past the supply capacity. This is important because this increase in demand results in the formation of waiting lines. Waiting lines may at times result in customers leaving before being served. In most cases, service providers are unable to effectively inventory the services offered to the customers.

There are two cost categories associated with the waiting lines. In order to provide a balance for the lines, it is critical to provide a balance between the service charge and the waiting cost. This can be achieved when no other costs are considered i.e. in terms of the scheduling system costs. It is a management strategy that is designed for reduction in waiting time. The waiting lines have different arrival points depending on the service type. This implies that the costs of waiting have to cater for the waiting time for particular services. It is thus vital to manage waiting line costs in order to reduce extensive waiting. This eventually results in greater customer satisfaction.

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