Real Cost of Waiting in Queue
How much money are you ready to pay in order to avoid a wait of 10 minutes at a bank queue?
Your answer to this question indicates your opportunity cost of time. This amount might change from person to person, and even from hour to hour for a specific person. For example, you might agree to pay higher amounts when you are very busy or you might suggest lower amounts when you are strapped for cash. Or you can calculate this amount by your average wage per hour. For example, opportunity cost of waiting 10 minutes is approximately $210,000 for Mark Zuckerberg . But let’s suppose your opportunity cost of waiting 10 minutes is 5 TRY (approximately $2).
A study in UK indicates that people spend approximately 10.5 days per year while waiting in queues at shops and retail outlets, banks, entertainment venues or call centers.
Now, if we multiply our opportunity cost of time with 10.5 days, we get 7,560 TRY which is our cost of waiting in queues per year. Putting it another way, this cost also means that you are ready to pay 7,560 TRY per year for not waiting a single second. I suppose now you get a clue why you cannot have enough time or money to go that vacation you always want to!
Keeping in mind that your customers might be – or will be– aware of this fact, they could certainly search for ways and methods to minimize their waiting times. Researches points out that roughly one out of every two customers avoid the brand in the future in case of longer than approximately 5 minutes waiting times .
Therefore, it is very important to design smart queues for the firms to eliminate customer loss. But it is also critical for social optimality; since time is our most scarce resource and money is our most effort-intensive gain.