Project Management and Variability

Waiting time occurs when expected demand exceeds expected supply.

Also can occur if the implied utilization is below 100 percent

Call centre example

• Capacity can never "run ahead" of demand. However, demand can "run ahead" of capacity, in which case demand builds up.

Why does variability occur?

• Variability from the inflow of flow units. Comes from the market itself.

• Variability in processing times. When dealing with human operations, it is likely that there will be some variability in their behaviour.

• Random variability of resources. Random breakdowns can lead to failures in manufacturing.

• Random routing in case of multiple flow units in the process.

In general, any form of variability is measured based on the standard deviation.

Analysing an Arrival Process

Two important questions to always ask when using computations to make projections

1. Is the arrival process stationary; is the expected number of customers arriving in a certain time interval constant over the period we are interested in?

2. Are the inter-arrival times exponentially distributed, and therefore form a so-called Poisson arrival process?

Stationary Arrivals

• An arrival process is said to be stationary

○ Expected arrivals only depend on the length of the time interval and NOT the starting time of the interval

• An arrival process exhibits seasonality if it is not stationary.

Seasonality can be predicted but not variability.

Exponential Inter-arrival Times

If IA is a random inter-arrival time and the inter-arrival process follows an exponential distribution,