Académique Documents
Professionnel Documents
Culture Documents
1.0 Introduction
As the world turns to a global village characterized by intense and ever increasing competition,
operation bank managers continue to experience wrenching changes, which they must keep up
with for survival. Bank customers have also become increasingly demanding. Today, they
require high quality, low price and immediate service delivery and tomorrow, they want
additional components of value from their chosen banker. Since service delivery in banks is
personal, customers are either served immediately or join a queue (waiting line) if the system is
busy.
Waiting line is what we encounter everywhere we go, while shopping, checking into hotels, at
hospitals and clinics e.t.c in additional non-queuing environment, customers left confused as
what line to stand in, what counter to go to when called by noisy crowded environment (Yechiali
etal, 1995).
They obvious but unfortunately at large either because nobody speaks for this most marginalized
sector of our society or because many pretend that such issues are not significant.
The Government found it difficult to handle the situation or they are not aware of it because is
considered as the institutions problem that many to those in different areas. Many societies know
All though this is not an excuse for failure to intervene, it is necessary to armed with relevant
data and information that will validate the problem that people are facing, convince policy
makers, service providers, community leaders, government and other stakeholders, and inform
1
the planning of future interventions. Bank customers accumulate numerous experiences that we
cannot maintain to sufficiently understand; they are seen but are not heard and thus poorly
understood. This research seeks to create a mechanism for these people’s voices in Tanzania that
has in Dodoma, it seeks to understand the true situation in the region and thus provide initial
Consistent to now days of development, the process has become one of the big issues that are
barely observing. Problem is not reducing. This study questions the level of effectiveness of the
services and liability that hold on approaches considered inadequate in influencing the changes.
It therefore wishes to examine these approaches, the messages derive from them, and the motives
underlying resolve to early approaches despite of the changing of some systems of services in
those Banks.
The obvious cost implications of customers waiting range from idle time spent when queue
builds up, which results in person-hour loss, to loss of goodwill, which may occur when
customers are dissatisfied with a system. However, in a bid to increase service rate, extra hands
2
The responsibility is then on the management to strike a balance between the provision of
satisfactory and reasonable quick service and minimizing the cost of such service. Thus, the
management should evaluate performance of different queuing structures and strike a middle
ground between costs on one hand, which is the main thrust of this study.
The primary objective of this study in the line with the identified problems is to determine
whether the present capacity level in the banking industry, using National Microfinance bank
(NMB) as a case study. Strike a balance between the cost of providing service and the time of
ii. How the waiting time will be affected if there are alteration in the facility to the system,
and,
iii. Make policy recommendation base on the findings from the study.
3
1.3 Justification of the study
The previous works on the subject matters of this study only identify the need for the application
of queuing models to customer waiting problem in different banks and associated costs but fails
to determining the maximum number of services that can be used in order to minimize total
i. Find out the problems that facing customers who have an account to those Banks
in Dodoma.
ii. Provide data of the people who are facing the problem in the region.
iii. Obtain the reasons for these people are in the situation.
v. Make policy recommendations on the findings from the study on effective actions
that can reduce the problem of which they can be solved to those people.
iii. How many are getting good services from the Banks?
iv. What are their unique experiences (opportunities, knowledge, and challenges)?
4
CHAPTER TWO
Queues are integral parts of any service system, which refers to the whole situation from arrival
According to Ashley (2002), the variants of queuing models that can be applied to waiting
problems include; a simple system, multi-channel system, constant service and limited
population model. A simple system (MMI) is a single line and single server system, which
consists of items forming a single queue, which is served by a single facility while a multi-
channel system is a system where two or more servers available to handle arriving customers’
needs. Here a common line is formed and the customers at the head of the line proceed to the
In Nigeria, a study conducted by Oladabo (1988) revealed a positive correlation between arrival
rates of customers and bank’s service rates. He concluded that the potential utilization of the
banks service facility was 3.18% efficient and 68.2% of the time. However, Ashley (2000)
asserted that even if service system can provide service at a faster rate then customer’s arrival
rate, waiting lines could still form if the arrival and service processes are random.
One week conducted by Elegelam (1978) revealed that 59.2% of the 390 persons making
withdrawals from their accounts spent between 30 to 60 minutes while 7% spent between 90 and
20 minutes. Baale (1996) while paraphrasing Alumatu and Ariyo (1983) observed that the mean
time spent was 53 minutes but customers prefer to spend a maximum of 20 minutes. Their study
revealed worse service delays in urban centers (average of 64.32 minutes) compared to (average
5
of 22.2 minutes) in rural areas. To buttress these observations, Juwah (1986) found out that
customers spend between 55.27 to 64.56 minutes making withdrawal from their accounts.
In situations where facilities are limited and cannot satisfy the demand made upon them,
bottlenecks occur which manifest as queue but customers are not interested in waiting in the
queues (Kelly, 2001). When customers wait in the queue, where the danger is that, waiting time
will become excessive leading to the loss of some customers to competitors. (kotler, 1999). But
allowing them to serve themselves so easily is a key factor in both keeping and attracting
A queue for the purpose of this study is the aggregation of customers waiting a service function.
It is an everyday occurrences and results when the numbers of calling units exceed the number of
A Simple System (MMI) is a single line and server system that consist of items forming a single
queue, which served by a single facility while multi-channel system is a system where two or
more server or channel available to handle arriving customers’ needs. Here, a common line
formed and the customer at the head of the first line proceeds to the first server.
There is also a constant service Time Model where the customers service time is constant instead
of exponential distributed times and lastly, the limited population model where there is a
dependent relationship between the length of the queue and the arrive rate. Among all these
models, those can be applied to solving customer waiting problems in the banks are the simple
The three main characteristics that determine the appropriateness of a queuing model is; the
arrival to the system, queue discipline and the service facility (Safe Associate, 2002).
Arrival characteristics of waiting line are related to size, pattern to arrival and service time
distribution. The size of the source population may be unlimited when the number of arrival on
hand at any given moment is just small portion of the potential arrival or limited when the
The pattern of arrival at the system considered random when arrivals are independent of one
another and their occurrence cannot be predicted exactly. In addition, the number of arrivals per
unit of time in queuing problems can be estimated by a Poisson probability distribution. The
service time distribution may be constant when it takes the same amount of time to take of each
customer or random when the reverse holds. If arrival rare is Poisson distributed, a negative
This refers to the priority rule by which customers are served, that is, the order in which items
received service. According to Jay and Barry (1993), two main categories include;
arrive at any time to replace customer that are being served e.g patient treatment in
hospitals.
7
2) Non-Preemptive Priority; here, items in the queue are arranged so that the item which
the highest priority in the system is served first and there is no displacement of items in
(i) FIFO (First-in-First-out); allows the first item to enter the system (items at the
head of the queue) to be served first. It is the most frequently applied discipline
(ii) LIFO (Last-in-First-out); here the last item on the queue or that which enters the
This is the nature of the queuing in terms of input, queue and service mechanism. This is
illustrating below.
Figure 1
QUEUE SYSTEM
INPUT OR QUEUE
SERVICE SERVED UNIT OR
SOURCE MECHANISM EXIT
8
a) A single service channel and is variables arrival following a Poisson distribution while
that has no simultaneous arrival and there is neither balking nor reneging.
According to Safe Associates (2002), a multi server system has all the features of simple queue
and in addition assumes no limit to the permissible length of the queue. Also, all servers are
Efforts in this study are directed towards application of reducing the queuing of customers are
Chapter Three
9
Tanzanian Banking Industry most bedeviled with customer waiting problems is studied here for
a period of four weeks in the National Microfinance Bank in Dodoma, through observation,
interview and questionnaires administration. The variables measured include arrival rate (I) and
service rate (m). They variables were analyzed for simultaneous efficiency in customer
satisfaction and cost minimization through the use of a single channel and multi-channel queuing
models, which are compared for a number of queue performances such as the average time each
customer spends in the queue and in the system, average number of customers in the queue in the
In the realization of these objectives, primary data in respect of customer arrival rate and cashier
with also ATMs service rate were used and were obtained through observation while customer
attitude survey was carried out through a total of twenty questionnaire in the period of three
weeks were administered. These activities carried out for four weeks (May 2010).
The variables analyzed using the queuing Models presented in the table below;
Since there are (5 x 52 weeks) i.e 260 working days in a year , with the exclusion of public
holidays, a 27 working days of May 2010 used in this study while the working hours per day is 8
hours.
10
This is a classical problem in queuing theory, Should there be multiple queues, one for each
ATM in the bank, or should we have one single queue for all the ATMs? I have this version of
the problem from an example of the two situations are shown in figs. 2.0 and 2.1.
Q1 T
1
Arrive Leave
Qn
T
n
T
1
Queue Leave
Arrive
T
n
First look at fig. 2.0. Customers arrive to exponential distribution (which produces inter-arrival
times) and they immediately go to any teller that is free (not busy). If all tellers are busy with the
line then the customer chooses the shortest queue to wait for service. Once in a queue the
customer waits there, and does not jump to other queues, in a first-come-first-served basis, until
he/she has completed their business. Customers require die rent types of transactions in table 2.0.
This table gives the probabilities and approximate mean service times for each of these types of
transactions.
11
Formulas
i. Probability that there are no customer in the system i.e the ATMs are idle (PO)
1-I
M.
Sm-1(I/m0) m mu
mu- I
Sm-1(I/m) + (I/m0) m mu
m! mu-l
n= 0 n! m! mu-l
12
I-m.
I/m(I/m)2 (PO)+ l
(m-I)! (mm-l2) m
mm-I m
I/m(I/m)m (PO)+ 1
(m-I) ! mm-l m
I/l – m.
LS/I
LS/I
I2
(m – I)
LS- I/m
m (m-I)
LO/I
13
Lq/I
P, Ls, Ws, LQ and WQ are conventional symbols for measuring the performance they
describe.
This research based in Dodoma institution, which are including of the following;
National Microfinance Bank (NMB) which are the Main branch and Mazengo branch.
The major language spoken is Swahili, because most of the locals understand and speak Swahili
fluently.
This research was focus on the customers’ population who have opening account or are served
by this bank in Dodoma. It was attempt to draw out information from all of them who are
accessible to the research, thus no form of sampling were be required. It is expected that the
research provided detailed information on all the customers defined in this category. It is
however predict that the follow-up to this research were involved attempting to reach the ATMs,
branch managers and customer service of the particular institutions. Since this research was
trying to provide detailed information on all the customers having this situation in Dodoma.
Both Primary and Secondary sources were employed in data collection. Primary source helped
so much the researcher to obtain first hand data, this included questionnaires and focus group
14
discussions using checklists. Secondary source of data such as journals, reports, books and
The sampling frame included those customers was twenty (20) by whom the numbers of
The samples were included individual workers, students and the business people.
This is a number of substance/elements that selected from the population (sampling figure) to
constitute a sample. The sample size strained from a particular number of customers in two
Workers 3 4 7
Students 5 3 8
15
Business people and entrepreneurs 2 1 3
Total 10 8 18
due to time and financial resource constraints, and given the size of the population sampling
based on selected number of customers themselves in the two branches, who were
Sampling is an activity in which a portion, rather that the whole population, was selected for
surveying. The respondents selected in the sample used to represent the whole population. The
research conducted by using two sampling techniques that were random sampling and purposive
sampling that means that both probability and non-probability sampling were used.
Stratified random sampling method, used to select the customer by considering their positions
that stratified to students, workers and those business people as the study respondents from the
two branches.
16
3.2.8 Purposive sampling
Five key respondents were selected due to the position they hold since their day to day activities
are linked with the need of money from the bank. This constituted the total number of
respondents selected through the purposive sampling method which a researcher has chosen.
The study used different methods of collecting both primary and secondary data. The methods
3.3.2Interview method
This method used whereby that all the designated groups of respondents were interviewed using
open – ended question to ask for the required data and information.
Two sets of questionnaires were prepared whereas one were given to those customers found at
main branch and Mazengo branch while the other two set was given to the group but was
processed through interviews. Such questionnaires provided information to cover the objectives
of the study.
17
3.3.4 Secondary Data
Secondary data collected from different books, reports, national and international publications.
After collecting, data they were processed using computer, the processing involved, editing,
coding, classification and tabulation of the data collected. Thereafter the data analyzed.
Data obtained from the field was processed and analyzed for reliability reasons; the analysis
In some instances, data presentation was in a form of tables, graphs and statistically summarized
Data presented done in the form of tables, graphs and figures (statistical summaries) as
mentioned above.
18
The study carried out as a means of increasing stakeholders understanding of the issues related to
the customers who wants to draw their cash from the bank. The focus group discussion did not
take place in some cases as scheduled. Some of the key respondents such as students were
providing good information to a researcher as due to the touch of the problem. Some of the
respondents provided wrong answers because they believed their details might take to the other
way around which would affect their relationship with their bank. The shortcoming of the data
addressed during data entry and analysis in order to produce the highest quality data set possible.
CHAPTER FOUR
19
The bank through its policies and directives made some mechanism, which is still used up to date
on instruct those new users or customer who got their ATM Card lately. Many branches which
used to be depended on this service has been taken as not to solve the problem completely but to
some extent it has been at least a good way of saving those new customer. They are doing this by
providing some brochures that shows the instruction to the user of ATM card on the machines.
The bank’s responsibility is to take care of the customer who needs service from them. As an
example of CRDB bank limited in Dar es Salaam at Posta (city centre) at the new building of
Benjamin Mkapa also known as Mafuta house, they installed many ATMs machines which helps
to reduce the queue of customer. Customers of a particular bank are getting fast and reliable
service and for a short time, which means the system is fast and is a friendly user.
In Tanzania, many Banks are providing ATM service such as Azania Bancop, Tanzania Postal
Bank, Exim Bank limited, Barclays Bank limited, Dar es Salaam Community bank, BOA bank,
National Bank of Commerce (NBC), Diamond Trust Bank (DTB), Twiga Bank, just to mention a
few.
This chapter presents the major findings of the study whereby the problem of the customer
observed.
The findings reflect the general objective of the study as well as specific objectives. Thought
prepared in the course of deliberate variables in order to bring comprehensive and valuable
report. The use of clear presentation in data interpretation was the main tool used for reporting
The average time a customer spends in the in the queue are 25 minutes and 1.05 minutes
respectively for in the ATMs machine and this is for two machines with a single line. However,
20
with those with single line and single machine they use 35 and 40 minutes, this is further worse
than that of single line with two ATMs that records 15 and 20 minutes in the queue and in the
ATMs. In terms of the number of the customers in the 2 ATMs system has almost 20 and 25
customers and a 1 ATMs system with a single line have 15 and 20 customers in the queue. The
probabilities of idleness of the machine are 2%, and 5% for a 2 and 4 ATM machines. The
average time of a customer spends in the queue and in the system for a 2 ATMs is 12.5 minutes
and for a 4 ATMs system is 17.5, and the average of a system to be idle is 0.02 minutes and 0.05
minutes.
Performance Measures
-0.05
2%
5%
21
-2.14
14.5
3.2
0.25
0.15
14 min
20 min
The appropriate of a single line with a 2 Tellers for solving customer-waiting problems become
an important as it shows the minimum time for a customer to reach the machine in all
performance. However multi-channel as single line per machine were compared and it was seen
that;
22
1. Using a single line for 2 Tellers machine is better than a single Teller system for a single
line, as due to the little time spends in a single line for 2 Tellers.
2. The bank adopted a both lines system for drawing money from the Tellers and the rate is
quiet reduced to some extent. While a customer has to wait for a service more than 40
minutes now the customer has to wait for 10 minutes to get service. The introduction of
new ATMs has reducing the loss of customer by 60% (obtained from the staff). It was
also noticed that friends of those who came earlier in the line helped by them to get quick
The study has shown that several things among the customers caused the increase of customer in
Salary is a major thing of which brings many people to ATMs for the drawing of their cash,
70.55% of the customer who was in the line to draw the money from their salaries as per
interview between the researcher and the customers. Most of these groups were the workers who
Paying of bills and buying the electricity unit known as LUKU through ATMs is among of the
issues that cause of the queue in the particular places, 5% of customers are there to pay the bills.
The study further discovered that also the other group of which affected by the queue is the
student who goes to the ATMs for the money from the Loan Board for the accommodations,
23
stationeries and meal when they are in the study. 15% shows that they are in the problem
Another group is the business people and entrepreneurs who come to draw the money for their
daily spend on their business and investment for the payment to their wages. This group took 5%
of the sample taken, and they are a large group that is facing this problem in a specific time.
The target group of customer is workers, students and the business people or entrepreneurs who
spent most of the time in the line to get service from the ATMs and gets their money as indicated
in the table 1. These group customers in the daytime are coming to the bank seeking service
particularly in the ATMs by then them find a long line of people for that service. As they stay on
the line almost for an hour to reach the system and draw the money for the end.
A total number of 18 customers interviewed to determine their occupations, which were workers,
students and business people. The figure 1 and table 1 below shows that, a larger percent of
When these customers asked to state their ages by chance enough all the customers who asked
responded. Many of them were men and relatively a little number of them women. Some
appeared hesitant especially those found complaining that many related people like in office
researcher interviewed them many times but they did not get the promised solutions.
24
Table 2: Age and Sex Distribution of customers
32-39 4 80 2 20 5 100
40-49 1 25 3 75 4 100
Many of the customers interviewed were men, as they were (12) and very few women (7). A
large percentage of customers fell in the age 26-33 age groups, followed by 32-39 age group
those over 40 years relatively few in number that they were few during the interviewed session.
25
Salaries 7 38.89
Total 18 100
The response of the customer about their reasons for being in the line as shown in the above table
3. There was nearly half of them (38.89%) which is 70.55% of the sample were there to draw the
cash from the salary, while the second group were students who receives their cash from the
loan board which was (27.77%) also in a range of 15% in a sample being interviewed, while the
other group of paying the bills where 22.22% that was range on the 5% of the sample
interviewed by a researcher, lastly which lied on (11.11%) that was considered as a the lowest
group.
As the table 4, depict that most of the workers were in the queue during the end of the month of
which shows there were 53% of workers in that weekends there were 5% of the sample
interviewed. Those who came to draw the money on weekends were mostly students in which
89.92% interviewed.
The study showed that the number of customer kept on growing year after year. This can be
official the number of growth in Dodoma hence the increase of queue in the ATMs is getting
higher than before. With the rate of 40 in 2006, followed by 60 in 2008 and the late rate were 80
in 2009. The trend showed that the increase of customers would keep rising, as the bank will not
27
Source: NMB bank (2010)
CHAPTER FIVE
This study uncovered the applicability and extent of usage of queuing in achieving customer
satisfaction at the lowest cost of time. Customers are unhappy due to delay in getting the service
from the ATMs while the bank is in reluctant in increasing the number of ATMs units because
A single line with single 1 ATMs is not effective when arrival rate exceeds service rate, while
the current single line to a 2 ATMs is used as to reduce the long queue. In addition, it is also
7.1 Recommendations
Based on the summary and conclusions of this study, the following recommendations are
1) The management should educate their operation managers and other staff on the
application of queuing models to operational problems to take a proper and quick action
2) The queue characteristics should be viewed from the standpoint of customer as whether
the waiting time is reasonable and acceptable by making queuing discipline fair and
3) Reengineering the banking operations through IT solutions e.g. voicemail and online
29
4) Making customers comfortable and unaware of waiting time by providing electronic
notice board, cooling and toilet facilities at the time when they are in the line.
5) To introduce the use of credit card for payment in the shopping, supermarkets, and also to
pay in the bus fair, as sometimes other customer may be forced to postponed his/her
6) The bank must looking toward those areas with high movement or population of its
customers so as to reduce the coming centre point to seek for their cash, there are some
places like at shells, and also in some institutions like St. John’s University main campus.
REFERENCE
Ashley, D.W (2002) Introduction to Waiting Line Models. Available at Google, http/www.com
Bale, A.F (2002) “Managerial Applications of Queuing Models in the Service Industry” A case
study of Afribank Nigeria Plc., Ilorin Main Branch “A research paper submitted to Business
Administration Department, University of Ilorin, Ilorin.
30
Charles Terbille, (1993) “Queuing Theory and References Transactions”, Reference Services
Review, Vol. 23 Iss: 3, pp.75-84. Published by MCB UP Ltd.
James J. Buckley, (2005), Simulating Fuzzy System, StudFuzz 171, 161-164. Springer-Verlag
Berlin Heidelberg. http://www.springerlink.com retrieved 2010-05-23
Nelson, R.T (1959) An Empirical Study of arrival, Service Time and Waiting Time Distribution
of Job Shop Production Process. Report No. 60, Management Research Project, University of
California, L.A
Oladabo, (1988) Relationship between Arrival Rates of Customers and Bank’s Rates.
Robert, B.T (1997) Customer Service for the New Millennium. Career Press 800:239-6681,
www.innovastioresource.com Retrieved 2010-05-19.
Seminar Paper Series, Obafen Awolowo University, Ile-Ife.
Wang, W.K, H.Y. Tang and V.C.M, Leung, (2004), Token Bank Fair Queuing; A New
Scheduling Algorithm for Wireless Services. International J. Commun, Syst, 17:591-614.
Yechial, U. Altmand, E. and Kofm, D. (1995) Discrete Time Queues with Delayed Information.
Vol 19:361-376.
31