QUEUING TIME OF THE AUTOMATED TELLER MACHINES OF THE DEVELOPMENT BANK OF THE PHILIPPINES CATARMAN

A CASE STUDY
DIAZ, KAREN ROSALI DONINA, ALLAN GAVINO, JENNIFER LABIAN, CHARISSE RODELAS, JOY FRANCES

INTRODUCTION
Queuing Theory is the mathematical study of waiting lines or queues. This theory can be used to model and predict wait times and number of customer arrivals. Any time there is more customer demand for a service than can be provided, a waiting line occurs. Among the various services offered by banks is the use of automated teller machine or ATM. ATM is an automatic teller machine which is used to save the cost and reachability of a bank by satisfying customer needs. Customers can withdraw and deposit money without any paper work and it facilitates them to reduce time and cost to go to bank in person. This case study focuses on the queuing time of the ATMs of the Development Bank of the Philippines (DBP). Currently, DBP have two ATMs, one is placed inside the bank and the other is placed outside. During the our observation, the two ATMs were not used simultaneously. On the first hour of the observation, the ATM inside the bank was the one used by the customers. In the second and third hours, when the bank was closed, the ATM outside the bank was used. The figure below shows the queuing system of the Automated Teller Machines of the DBP which is a single line system.

ARRIVALS

SERVICE FACILITY

DEPARTURE AFTER SERVICE

SYSTEM
Figure 1

The single line set up keeps the workstations busy and distributes services fairly among customers. This is most effective when all operations demanded by a customer can be performed by a single workstation. A first-come, first-served rule is applied in the ATMs where priority is given to those that enter the line up first.

QUEUING EQUATIONS

1. The average number of customers or work units waiting in line or being serviced:

2. The average number in the waiting line:

3. The average waiting time before service:

where, B = average number of work units arriving in one unit of time T = average number of work units serviced in one unit of time

FIRST HOUR OBSERVATION 2:27-3:27 P.M., WEDNESDAY, AUGUST 28,2013 Customer # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Waiting Time Time Interval 2:27 2:29 2:30 2:33 2:35 2:40 2:41-2:42 1 2:42-2:44 2 2:43-2:44 1 2:45-2:46 1 2:54 2:54 2:56 2:58 2:59-3:00 1 3:00-3:01 1 3:06 3:07-3:08 1 3:09 3:10 3:10-3:11 1 3:15 3:16 3:16-3:17 1 3:20 3:22-3:23 1 3:24 TOTAL 11 minutes Service Time 2:27-2:28 2:29-2:30 2:30-2:31 2:33-2:33 2:35-2:36 2:40-2:42 2:42-2:44 2:44-2:45 2:44-2:44 2:46-2:47 2:54-2:54 2:54-2:55 2:56-2:57 2:58-3:00 3:00-3:01 3:01-3:04 3:06-3:08 3:08-3:09 3:09-3:10 3:10-3:11 3:11-3:12 3:15-3:16 3:16-3:16 3:17-3:17 3:20-3:22 3:23-3:24 3:24-3:25 TOTAL Time Interval 1 1 1 1 2 2 1 1 1 1 2 1 3 2 1 1 1 1 1

2 1 1 30 minutes

Figure 2

SECOND HOUR OBSERVATION 3:27-4:27 P.M., WEDNESDAY, AUGUST 28,2013 Customer # 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 Waiting Time 3:29 3:35 3:35-3:41 3:38 3:39-3:43 3:39-3:43 3:40 3:41-3:42 3:43-3:44 3:46 3:47-3:48 3:47-3:51 3:52 3:57 4:00-4:01 4:01-4:02 4:03 4:03 4:06 4:06-4:07 4:13 4:13-4:14 4:14-4:18 4:16-4:19 4:19-4:22 4:20-4:23 4:21-4:25 4:21-4:27 4:23-4:30
TOTAL

Time Interval

6 4 4 1 1 1 4

1 1

1 1 4 3 3 3 4 6 7 55

Service Time 3:29-3:33 3:35-3:41 3:41-3:42 3:38-3:39 3:43-3:43 3:43-3:44 3:40-3:40 3:42-3:43 3:44-3:45 3:46-3:48 3:48-3:51 3:51-3:53 3:53-3:53 3:57-4:01 4:01-4:02 4:02-4:03 4:03-4:04 4:04-4:05 4:06-4:07 4:07-4:08 4:13-4:!4 4:14-4:18 4:18-4:19 4:19-4:22 4:22-4:23 4:23-4:25 4:25-4:27 4:27-4:30 4:30-4:31
TOTAL

Time Interval 4 6 1 1 1 1 1 2 3 2 4 1 1 1 1 1 1 1 4 1 3 1 2 2 3 1 50

Figure 3

THIRD HOUR OBSERVATION 4:27-5:27 P.M., WEDNESDAY, AUGUST 28,2013 Customer # 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 Waiting Time 4:30 4:31-4:32 4:32-4:33 4:32-4:34 4:33-4:35 4:33-4:36 4:34-4:37 4:35-4:38 4:37-4:39 4:37-4:40 4:39-4:43 4:39-4:44 4:39-4:45 4:41-4:46 4:44-4:47 4:44-4:54 4:44-4:53 4:45-4:55 4:46-4:56 4:47-4:58 4:54-5:00 4:54-5:02 4:56-5:03 4:57-5:04 4:57-5:05 4:59-5:08 4:59-5:10 5:00-5:13 5:03-5:09 5:03-5:13 5:05-5:14 5:06-5:16 5:06-5:17 5:07-5:19 5:07-5:18 5:07-5:21 5:08-5:20 5:08-5:24 5:13-5:25 5:13-5:27 5:13-5:30 5:15-5:31 5:19-5:33 5:19-5:34 5:22-5:35 5:23-5:37 TOTAL Time Interval 1 1 2 2 3 3 3 2 3 4 5 6 5 3 10 9 10 10 11 6 8 7 7 8 9 11 13 6 10 9 10 9 12 11 14 12 16 12 14 17 16 14 15 13 14 372 Service Time 4:30-4:32 4:32-4:33 4:33-4:34 4:34-4:35 4:35-4:36 4:36-4:37 4:37-4:38 4:38-4:39 4:39-4:40 4:40-4:43 4:43-4:44 4:44-4:45 4:45-4:46 4:46-4:47 4:47-4:53 4:54-4:55 4:53-4:54 4:55-4:56 4:56-4:58 4:58-5:00 5:00-5:02 5:02-5:03 5:03-5:04 5:04-5:05 5:05-5:08 5:08-5:10 5:10-5:13 5:13-5:16 5:09-5:13 5:13-5:14 5:14-5:17 5:16-5:17 5:19-5:20 5:19-5:20 5:18-5:21 5:21-5:23 5:20-5:21 5:24-5:25 5:25-5:27 Time Interval 2 1 1 1 1 1 1 1 1 3 1 1 1 1 6 1 1 1 2 2 2 1 1 1 3 2 3 3 4 1 3 1 1 1 3 2 1 1 2

TOTAL

66

Figure 4

WAITING TIME
18 16 14 12 10 8 6 4 2 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 First Hour Second Hour Third Hour

Figure 5

SERVICE TIME
7 6 5 4 3 2 1 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 First Hour Second Hour Third Hour

Figure 6
The data shows that more customers arrived at 5:00pm and beyond. This is because the employees time out or free time is 5:00pm onwards. This data may also yield the same result during lunch breaks.

CALCULATION
Average number of customers waiting in line or being served

N = 1.307

Average number of customers in the waiting line

0 5 0 5

5 0

NQ = .74
Average waiting time before service

W = .02179 or 1.305 minutes

NOTE 1: AVERAGE NUMBER OF CUSTOMERS THAT ARRIVED (B)

Time 2:27-3:27 3:28-4:27 4:28-5:27 Total customers arrived # of customers 27 29 46 102 = = = 34 customers Page # 3 4 5

Average # of customers that arrived

NOTE 2: AVERAGE NUMBER OF CUSTOMERS BEING SERVED (T)

The used value of T is an estimated value of the average number of customers an ATM can serve at a given time. Figures 2, 3 and 4 show that a normal transaction, without delay, is 1 minute per customer. In normal transactions, the ATM can accommodate an average of 60 customers per hour, or 1 customer per minute assuming there is no delay in their transactions.

NOTE 3 The actual computed average number of served customers for an hour is computed as follows:
Time 2:27-3:27 3:28-4:27 4:28-5:27 Total customers served Average # of customers served # of customers 27 27 41 95 = = = 31.67 or 32 customers

The average actual computed value of 32 customers is different from the average estimated value of 60 customers per hour due to factors such as: 1. Customers dont know how to use ATMs causing delays; 2. Customers who fall in line only to find out they dont have sufficient balance in their account; 3. Customers indulge in paniningit with other customers in queue; 4. The delay in transaction of electronic responses from one bank to another when a customer withdraws not in the principal bank. There is delay, thus, lesser customers will be accommodated at a given time; 5. Peak season. Data gathered during ordinary days is different during peak seasons (remuneration days, distribution of 4Ps).

CONCLUSION
This case study uses queuing theory to study the waiting line or queuing time in the Bank ATM of DBP Catarman. The bank provides two ATMs in the main branch. The data computed shows that an average of 34 customers arrives and 60 customers are being served (assuming no delay in transaction) in an hour. The average number of customers in line and being served for a minute is 1.307. The average number of customers waiting in line is .74 per minute and the average waiting time for every customer before service is 1.305 minutes. This case study can contribute to the betterment of a bank in terms of its functioning through ATM. Waiting line models are important to banks because they directly affect customer service perception and the costs of providing a service. Quick service or response can be a competitive advantage. Long waits suggest a lack of concern by the company or can be linked to a perception of poor service quality.

The average number of customers waiting in line and in the system. The number
of customers waiting in line can be interpreted in several ways. Short line ups can translate as good customer service, or it could mean too much capacity. Alternatively, long line ups can indicate poor service, or not enough capacity utilization. The number of customer in a line up also relate to the process efficiency and capacity. Long waiting lines can result from poor server efciency inadequate system capacity and/or signicant surges in demand.

The average time customers spend waiting, and the average time a customer spends in the system. Customers often link long waits to poor-quality service. If too much
time is spent in the system, customers might perceive the competency of the service provider as poor. Managements goal is to have enough servers to assure that waiting is within allowable limits but not so many servers as to be cost inefcient.

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