Optimizing the service configuration with the least total cost approach

Abstract

Presents an approach to optimize the service configurations of a student canteen utilizing computer simulation and a total cost function that incorporates both the cost of services and the cost of waiting. The cost of waiting is measured in terms of the impact of waiting on the customer satisfaction and the resulting changes in future repurchases. By collecting data of waiting time and customer satisfaction from a student canteen, first evaluates the impact of waiting time on customer satisfaction and future purchase frequency. Subsequently develops a simulation model to simulate the service processes and waiting line behavior at the student canteen. By varying the number of servers at the two different stages of services and calculating the total cost per customer served, the performance of the system was optimized considering both the service cost and the cost of waiting in term of its impact on future purchases. The approach presented can be used with modification in designing service configurations for a variety of service organizations.

Citation

Zhao, X., Lau, R.S.M. and Lam, K. (2002), "Optimizing the service configuration with the least total cost approach", International Journal of Service Industry Management, Vol. 13 No. 4, pp. 348-361. https://doi.org/10.1108/09564230210445050