A queueing model for managing small projects under uncertainties

Jiaru Bai, Kut C. So and Christopher Tang

European Journal of Operational Research, 2016, vol. 253, issue 3, 777-790

Abstract: We consider a situation in which a home improvement project contractor has a team of regular crew members who receive compensation even when they are idle. Because both projects arrivals and the completion time of each project are uncertain, the contractor needs to manage the utilization of his crews carefully. One common approach adopted by many home improvement contractors is to accept multiple projects to keep his crew members busy working on projects to generate positive cash flows. However, this approach has a major drawback because it causes “intentional” (or foreseeable) project delays. Intentional project delays can inflict explicit and implicit costs on the contractor when frustrating customers abandon their projects and/or file complaints or lawsuits. In this paper, we present a queueing model to capture uncertain customer (or project) arrivals and departures, along with the possibility of customer abandonment. Also, associated with each admission policy (i.e., the maximum number of projects that the contractor will accept), we model the underlying tradeoff between accepting too many projects (that can increase customer dissatisfaction) and accepting too few projects (that can reduce crew utilization). We examine this tradeoff analytically so as to determine the optimal admission policy and the optimal number of crew members. We further apply our model to analyze other issues including worker productivity and project pricing. Finally, our model can be extended to allow for multiple classes of projects with different types of crew members.

Keywords: Project management; Multi-projects; Queueing models; Optimization (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221716301059
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:253:y:2016:i:3:p:777-790

DOI: 10.1016/j.ejor.2016.02.052

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().