Estimation of the mean waiting time of a customer subject to balking: a simulation study

To a customer, the waiting time for order processing for a product or service is important information for order placement. If the time foreseen for order fulfillment is long, the order might be lost to a competitor. In particular, modern principles of supply chain management highly suggest information sharing between entities in the chain and information technology has enabled customers to conveniently consider the waiting time for a potential balking decision. To help determine the design and operation of a manufacturing or service system in which a customer may balk based on the foreseen waiting time, this paper develops procedures to estimate the average waiting time of an order. Either the procedures allow the maximum waiting time for a balking decision to be random or do not require knowledge of the arrival process of customers before balking if the balking limit is known. For generality of the model, this paper considers general inter-arrival and service time distributions, and uses the simulation and regression approach.