A Market-Utility Approach to Scheduling Employees

Excerpt] Scheduling front-line service providers is a constant challenge for hospitality managers, given the inevitable tradeoff between service standards and operating expense. Traditional employee scheduling typically applies a cost-minimization approach to specify the level of front-line service providers who will be available to meet periodic demand. That cost includes the opportunity cost of lost customers, which is part of the pseudo-costs of understaffing. A confounding and often ignored effect, however, is the benefit generated by maintaining high service levels in a system where capacity exceeds demand. That is, scheduling more frontline service providers than the minimum level necessary to provide acceptable customer service (what might be considered to be overstaffing in some rubrics) may mean that customers receive service that is better than they expected (or what company standards prescribe). In this paper we report on a scheduling approach that explicitly considers the interrelationships among customer preferences, customer demand, waiting times, and scheduling decisions. This approach, which we call the "market-utility model for scheduling" (MUMS), helps managers consider the dynamics of scheduling service employees. First, we discuss the components that make up this approach, which includes methods from customer-preferences modeling, service-capacity planning, and the four tasks of labor scheduling proposed by Thompson. Next, we'll show how the model applies to balancing queue lengths and operating costs for an airport food-court vendor. Finally, we discuss the value of MUMS for hospitality managers.