- ISRAEL21c - http://www.israel21c.org -

Queuing is bad for your bottom line

Posted By ISRAEL21c Staff On October 6, 2008 @ 12:06 pm In | No Comments

It was Israel’s disorganized queuing system that prompted mathematician Prof. Refael Hassin to begin researching the economic efficacy of lines. It’s not surprising. Queuing in an organized fashion is virtually unheard of in the country, where shoppers tend to congregate in an unruly mass next to the counter, each waving the purchases they want in front of the cashier’s eyes.

What surprised the Tel Aviv University researcher, however, was the discovery that queuing can actually lengthen the time it takes a customer to get served, and also reduce a shop’s bottom line – findings that turn common sense on its head.

Hassin used game theory to study wait times in line. His study, which was recently published in the journal Management Science, suggests that waiting times are affected by a number of random variables, and that people who gather around a check-out in a crowd might be serviced more quickly and efficiently than people standing in line. Sometimes, it seems, disorder creates its own order.

In an ice-cream shop, for example, an arriving customer who crowds to the display case with other patrons will experience shorter waiting times for service, than when the same number of customers wait patiently in line. This means more ice cream will be served and consequently more money end up in the till.

“If there are 10 people in an ice-cream shop, on average you will be served after the fifth person if you do not wait in an organized line,” says Hassin. “Of course I might get served 1st, 2nd, or even last. But on average the statistics are based on human decision-making strategies: If one is deciding whether or not to enter a shop and sees many people there already, most would prefer an unordered queue – because in this circumstance there is a good chance of being served sooner than if one was waiting patiently in line.”

Hassin suggests that shops and businesses can introduce systems to cut down on waiting times, and decrease the number of frustrated customers who leave without making a purchase. TV, free cappuccinos, even an entry fee to a faster line is an option.

“I don’t suggest that companies hire more cashiers at the sight of a growing queue,” he says. “With some basic analysis, however, peak times of wait lines can be determined, and businesses can ensure that customers stay happy while waiting, by offering them entertainment like TV or maybe cappuccinos.”

Hassin also believes that customers have much to learn from his research. While many might assume that waiting patiently in line is inherently more democratic than pushing your way to the front, he believes that lines can often have the opposite effect.

“People in lines tend to think only about themselves and ignore their impact on others,” he explains. “If I join the line and you come later, you will wait longer because of me. Customers are often selfish and ignore the effect their behavior has on others.”

This is why in some cases it’s better to manage a queue in an unorganized non-democratic way, serve in reverse order of arrival, or conceal queue length information from potential customers, he explains.

Putting Hassin’s findings into practice may turn the service industry on its head, but Hassin believes it could also help businesses increase their profits.

Sign up for our Email Newsletter

For Email Marketing you can trust


Article printed from ISRAEL21c: http://www.israel21c.org

URL to article: http://www.israel21c.org/social-action-2/queuing-is-bad-for-your-bottom-line/

Copyright © 2012 Israel. All rights reserved.