Waiting Lines/Inventory Management
Waiting lines derive from demand exceeding capacity over a given period of time. There are six characteristics of lines - the source population; the way in which customers arrive at the service facility; the physical line itself; the way customers are selected from the line; the characteristics of the service facility itself; and the condition of the customers when they exit the system. We manage these characteristics by analyzing the line and how customers move through it. This is done using statistical methods to determine the line that best balances operational efficiency and customer experience.
Restaurants typically handle lines by providing a bar area at which customers can wait comfortably for a table, generating additional revenue for the restaurant as a side effect. Excess capacity can be bad, particularly for businesses with high fixed costs that require constant revenue streams to meet. We define capacity as the greatest potential output that can be achieved by a system.
2) Inventories are non-earning assets in that the goods have been paid for (becoming assets) but are not yet generating income for the company. When a company carries an inventory, that is a part of their business that is not yet earning money. While each individual component of the inventory is expected to earn eventually, the inventory as a whole is a relatively permanent fixture on the balance sheet and as such never turns into earnings.
The objectives of inventory control are to balance the needs of the operation and the desire of management to keep inventory levels as low as possible. Inventory control allows the firm to maintain operational continuity devoid of inventory-related work stoppages. However, proper inventory control also limits the amount of inventory on the balance sheet, increasingly operational efficiency.
The requirements for effective inventory management are measurement, scheduling, sales projections, and supply chain management. Measurement allows management to understand what inventories are on hand at all times. Projections allow management to estimate the upcoming inventory needs. Based on this, they must schedule inventory deliveries to match the upcoming requirements. Supply chain management allows management to work with suppliers to ensure that their inventory requirements are met.
