Service Quality in a Reduced payroll Environment: Applying Queuing Analysis to Customer Perception Case Study

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Robert DeWitt Yearout
Jack Ballard
Jimin Lee
Claudel McKenzie
Donna Parsons

Abstract

This study was conducted in a national retail pharmacy company’s stores inWestern North Carolinato examine the impact of the reduction of store staffing, primarily pharmacists and service staff, on customers’ satisfaction with service time.    Customer arrival rates and service times for each queue were conducted to determine optimal staffing.  A random customer survey in multiple store locations provided customers’ perceptions of service quality. Analysis determined that over 30% of the customers surveyed were dissatisfied with service time. A regression analysis demonstrated a significant linear relationship (σ = 0.05) between total service time and customer satisfaction. Study results indicate that cutting staff could result in an unacceptable loss of a competitive advantage.  Payroll cost savings of less than $70,000 per year could result in lost revenue dollars in excess of $1,700,000 per year.  Thus reducing staff hours (decreasing payroll) in the short term may negatively impact long-term effectiveness and productivity.

Article Details

How to Cite
Yearout, R. D., Ballard, J., Lee, J., McKenzie, C., & Parsons, D. (2013). Service Quality in a Reduced payroll Environment: Applying Queuing Analysis to Customer Perception Case Study. Industrial and Systems Engineering Review, 1(1), 51-58. https://doi.org/10.37266/ISER.2013v1i1.pp51-58
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Articles
Author Biography

Robert DeWitt Yearout, Department of Management and Accountancy The University of North Carolina at Asheville One University Heights Asheville, North Carolina 28804 USA

Professor Industrial Engineering Management

LTC Speciial Forces US Army (Retired)

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