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Investigating the Application of Queue Theory in the Nigerian Banking System

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  • FARAYIBI, Adesoji

Abstract

This study examined the application of queue theory in the banking system in Nigeria, with particular reference to GTBank and Ecobank Idumota branch, Lagos, Lagos state. The queuing characteristics of the banks were analyzed using a Multi-Server Queuing Model. The performance measures analysis including the waiting and operation costs for the banks were computed with a view to determining the optimal service level. Findings revealed that the traffic intensity was higher in GTbank with p =0.98 than in Ecobank with p= 0.78. Also, the potential utilization showed that Ecobank was far below efficiency compared to GTBank. Looking at the waiting time of customers in line and the time spent in the system, that is (Wq + Ws), we discovered that customers in Ecobank spent more time before being served both on queue and in the system than that of GTBank bank. The study concluded by emphasizing the relevance of queuing theory to the effective service delivery of the banking sector in Nigeria and strongly recommends that for efficiency and quality of service delivery to customers, the management of GTBank and Ecobank should adopt a 13-server model and 10-server model respectively to reduce total expected costs and increase customer satisfaction.

Suggested Citation

  • FARAYIBI, Adesoji, 2016. "Investigating the Application of Queue Theory in the Nigerian Banking System," MPRA Paper 73614, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:73614
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    File URL: https://mpra.ub.uni-muenchen.de/73614/1/MPRA_paper_73614.pdf
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    References listed on IDEAS

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    1. Deacon, Robert T & Sonstelie, Jon, 1985. "Rationing by Waiting and the Value of Time: Results from a Natural Experiment," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 627-647, August.
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    Cited by:

    1. MITEWU KABAMBA, Alex, 2019. "Modeling and Analysis of Queuing Systems in Banks: (A Case Study of Banque Commerciale du Congo-BCDC/Mbujimayi)," MPRA Paper 92579, University Library of Munich, Germany.
    2. Mehmet Ozcalici, 2023. "Integrating queue theory and multi-criteria decision-making tools for selecting roll-over car washing machine," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 33(2), pages 99-119.

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    More about this item

    Keywords

    Queue Theory; Banking System; Multi-Server Model; Traffic Intensity; Waiting Cost;
    All these keywords.

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General

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