Forecast errors in service systems

  • Authors:
  • Samuel g. Steckley;Shane g. Henderson;Vijay Mehrotra

  • Affiliations:
  • The mitre corporation, mclean, va 22102-7508 e-mail: sgsteckley@gmail.com;School of operations research and industrial engineering, cornell university, ithaca, ny 14853 e-mail: sgh9@cornell.edu;Department of decision sciences, san francisco state university, san francisco, ca 94132-4156 e-mail: vjm@sfsu.edu

  • Venue:
  • Probability in the Engineering and Informational Sciences
  • Year:
  • 2009

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Abstract

We investigate the presence and impact of forecast errors in the arrival rate of customers to a service system. Analysis of a large dataset shows that forecast errors can be large relative to the fluctuations naturally expected in a Poisson process. We show that ignoring forecast errors typically leads to overestimates of performance and that forecast errors of the magnitude seen in our dataset can have a practically significant impact on predictions of long-run performance. We also define short-run performance as the random percentage of calls received in a particular period that are answered in a timely fashion. We prove a central limit theorem that yields a normal-mixture approximation for its distribution for Markovian queues and we sketch an argument that shows that a normal-mixture approximation should be valid in great generality. Our results provide motivation for studying staffing strategies that are more flexible than the fixed-level staffing rules traditionally studied in the literature.