Waiting Line Models: Economic Cost of Long Customer Queues

Waiting Line Models
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June 20, 2022
Understanding the costs of bottlenecks is essential for any business manager. It allows him to address these constraints, streamline the process, and generate more profit in the end. In this article, the author would like to address one of the bottlenecks that businesses usually face – long customer queues.
Generally, the Queuing Theory shows that although customer queues may be considered ‘bottlenecks’ in the business, addressing this issue should be balanced with the costs. On the one hand, this is because operating in a manner that would remove queues would be very expensive for businesses CITATION Cor21 \l 1033 (CorporateFinanceInstitute.com, 2021). On the other hand, longer waiting times could cost sales, with studies showing that the average waiting time that clients are willing to wait is 14 minutes CITATION Tšend \l 1033 (Tšernov, n.d.). This suggests that waiting lines could hurt one’s sales revenues if kept unchecked.