There is a term for business economics of waiting lines. When a low level of service is experienced in a waiting line, a customer might not return. The upfront cost to a company for providing a higher level of service should coincide with the customer's expectations (Study, 2016). The direct economic cost of a waiting line is loss of sales. The customer can refuse to buy anything because of the long line.

There are three measurements used to determine the economics of a waiting line: population, the average number of customers in line; wait time, the average amount of time spent waiting; and system utilization rate, the percentage of time the servers are busy (Study, 2016). The optimal waiting line is the best-estimated number of potential customers that can fit into the service system at a specific period of time (Study, 2016). When the cost of a customer waiting in line exceeds the cost of having a server, the company should increase the expenditure on the servers by adding more servers to reduce waiting times (Anderson et al., 2016). Thus, this criterion could be used to justify expanding services.

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References

Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., Cochran, J. L., Fry, M. J., & Ohlmann, J. W. (2016).Quantitative

methods for business with CengageNOW(13th ed.). Boston, MA: Cengage Learning. ISBN-13:

9781305799257

Study. (2016).The business economics of waiting lines.Study.comhttps://study.com/academy/lesson/the-business-economics-of- waiting-lines.html