Actors paid to line up for IPhone launch in Poland

Those of us with children know an interesting pattern in consumer (child) behavior. People want to have what is hard or impossible to get. It must be this insight that explains why French telecom giant Orange has hired actors to line up in front of their stores during the Poland launch of the IPhone.

Usually, firms try to REDUCE the length of waiting lines – very much in the spirit of “Matching supply with demand”. But – even we admit – there is more to business than operations alone. Creating a perception of scarcity and increasing the difficulty for a consumer to obtain a product can actually INCREASE demand. Consumers view long lines as indicators of good quality. In fact, recent research combining models of Operations Management and Marketing show what our children have long figured out: “If you can’t get it, it probably is really good”…

http://www.reuters.com/article/newsOne/idUSN215519020080821 

Also see the research by Professors Debo and Veeraraghavan(http://opim.wharton.upenn.edu/~senthilv/)

More on Potty Parity

A recent post in our blog discussed NY City’s decision to require more restroom capacity for women than men. Several possible reasons were proposed, including that women may require more processing time on average. Turns out there is data on this. In one study women required nearly three minutes while men required on average 83 seconds (about 1/2 the time of women).  See …

http://www.csmonitor.com/2006/0119/p16s01-lihc.html

and a Feb 24, 1994, Wall Street Journal article titled “Potty Parity’ Lets Women Wash Hands Of Long Loo Lines — Several State Laws Give Jane As Many Johns as John”

The WSJ article is also interesting because it mentions that some architects are designing restrooms with movable walls. This allows them to adjust capacity depending on known demand fluctuations, i.e., flexible capacity for flushes. 

It would still be interesting to have some data on the variability of processing times across the sexes. With mean and variance data, one could get an estimate of how much more female capacity is needed to equate average waiting times. (Of course, other objectives are possible, such as equating the probability that each will be “served” within 5 minutes, or whatever threshold is deemed to be appropriate.)

Women need more capacity – potty parity laws

When it comes to potties, “separate but equal” may not be equal enough – NY’s City Council decided that public venues like arenas, nightclubs and theaters must provide a female-to-male restroom ratio of two to one. This provides an entertaining context to discuss queuing theory.

We all know that women often have to queue to use the restroom while men usually do not. To devise the appropriate solution, it is important to know why. Queuing theory provides useful guidance.

In short, a queue will form when the load on the system exceeds its capacity, where the load is the arrival rate multiplied by the time to process each request. Think of load as the desired number of flushes per minute and the capacity as the feasible number of flushes per minute. This raises several possibilities for why the queue in the women’s room is longer:

(1) The arrival rate of women is higher, either because there are more women than men at a particular venue (doubtful at Madison Square Garden’s Monster Truck Smash) or because women need to use the restroom more often (absolutely true in some families);
(2) The arrival rate of women is more variable. Hard to imagine this is so unless the women’s basketball team bus arrives or women have a greater tendency to use the restroom in packs.
(3) Women have a longer processing time. Data could in theory be collected on this, though discretion would be appropriate;
(4) Women have a more variable processing time. Again, many theories, little hard evidence;
(5) Less capacity per restroom – How many people can flush simulataneously in a restroom? On a per square meter basis, urinals are very efficient.

When it comes to restrooms we probably do not want to consider options that would either strive to (i) decrease the mean or variance of their arrival rate or (ii) change their restroom behavior to decrease the mean or variance of their “processing times”. That leaves cause (5) above as the solution – increase capacity. 

A simple solution to increase capacity is to pool capacity - unisex restrooms.  This, of course, is a non-starter in some cultures. The obvious alternative is to add more women’s restrooms (i.e., more possible flushes per unit time),  which is exactly what NY City has legislated.

This leaves open two questions – why do we need legislation to fix this? (i.e., why doesn’t the market work here) and how do we get men to leave the seat down?

NY Times, July 18, 2008
A ‘Women Only’ Restroom Renovation Tips the Balance at Grand Central
http://www.nytimes.com/2008/07/18/nyregion/18bathrooms.html

24h wait in the ER / video of a patient collapsing while waiting

Long waiting times and crowded ERs have unfortunately become rather common in the US – sadly enough, the country has gotten so much used to this fact that a crowded ER or a diverted ambulance is not news any more. The tragic story of a NY woman collapsing in the ER of a psychiatric ward, however, made it into the national news. Her collapse and subsequent death were captured by the video system installed in the waiting room and the video made it onto YouTube. When the patient collapsed (after having waited for 24h), nobody (neither patients nor hospital employees) noticed or cared. A sad reminder about the importance of service operations management (including the management of waiting times) and quality management. For more details, see:

NYT July 2, 2008: Video of Dying Mental Patient Being Ignored Spurs Changes at Brooklyn Hospital 
http://www.nytimes.com/2008/07/02/nyregion/02hosp.html

How to reduce congestion?

Fewer drivers are using Manhattan’s bridges and tunnels, which should mean that there is less congestion in the city. One obvious explanation is the increase in fuel prices. Another is the increase in tolls that went into effect March 2008. Either way, economics seems to work – raise the cost of something and people do less of it. But this raises an interesting question – what is the best way to reduce congestion within the city?

Mayor Bloomberg had proposed a congestion tax of $8 for entering a certain portion of Manhattan during peak times. That is a fee targeted at usage when the system is most highly congested, which, according to queuing theory, should be a more efficient approach than raising the cost of fuel, which applies for travel at any time. However, the increase in fuel costs may be equally effective if consumers are only able to choose alternative means of transportation at peak times. For example, consider two trips – a visit to a friend’s house for a dinner party or a commute to the office. The train may bring the person to the office, but not to the friend’s house. Hence, as fuel prices increase, the first trip to be dropped is the car drive to the office. Hence, it is an open question as to how much more effective a targeted congestion tax would be. However, it is clear that an increase in the cost of fuel funds oil producers whereas a congestion tax funds the city’s efforts to improve transportation – they may have similar effects on congestion, but not on the allocation of resources.

Politics Failed, but Fuel Prices Reduce Congestion
NY Times July 3, 2008
http://www.nytimes.com/2008/07/03/nyregion/03congest.html