TY - JOUR
T1 - Managing capacity at a service facility
T2 - An experimental approach
AU - Delgado-Alvarez, Carlos A.
AU - van Ackere, Ann
AU - Larsen, Erik Reimer
AU - Arango-Aramburo, Santiago
PY - 2017
Y1 - 2017
N2 - Most research in queuing has focused on the optimisation of performance and equilibrium analysis, with little attention to the understanding of how managers actually make decisions. In this paper, we use an experimental set-up to investigate the decision-making process in a queuing capacity expansion problem, in the presence of capacity adjustment delays. The experiment represents a queuing system with one facility and virtual customers who decide whether or not to patronise the facility. Subjects play the role of facility managers who adjust the facility's service capacity to maximise profits. We analyse the actions of the manager to provide new insights into how their behaviour affects the evolution and success of the service system. Our results identify three types of managers: incremental, lumpy and reactive investors, and indicate that these groups use different decision rules. The first group achieved the best performance, and the last group the worst. While managers’ decisions are influenced by the backlog of work and the available service capacity, they do not correctly account for their past, but not-yet-implemented, decisions.
AB - Most research in queuing has focused on the optimisation of performance and equilibrium analysis, with little attention to the understanding of how managers actually make decisions. In this paper, we use an experimental set-up to investigate the decision-making process in a queuing capacity expansion problem, in the presence of capacity adjustment delays. The experiment represents a queuing system with one facility and virtual customers who decide whether or not to patronise the facility. Subjects play the role of facility managers who adjust the facility's service capacity to maximise profits. We analyse the actions of the manager to provide new insights into how their behaviour affects the evolution and success of the service system. Our results identify three types of managers: incremental, lumpy and reactive investors, and indicate that these groups use different decision rules. The first group achieved the best performance, and the last group the worst. While managers’ decisions are influenced by the backlog of work and the available service capacity, they do not correctly account for their past, but not-yet-implemented, decisions.
KW - Behavioural operations management
KW - Capacity adjustment management
KW - Experimental economics
KW - Queuing systems
KW - System dynamics
UR - http://www.scopus.com/inward/record.url?scp=85005951055&partnerID=8YFLogxK
U2 - 10.1016/j.ejor.2016.09.056
DO - 10.1016/j.ejor.2016.09.056
M3 - Journal article
AN - SCOPUS:85005951055
SN - 0377-2217
VL - 259
SP - 216
EP - 228
JO - European Journal of Operational Research
JF - European Journal of Operational Research
IS - 1
ER -