One means of evaluating a service facility is thus to look at a total expected cost, a concept
illustrated in Figure 13.1. Total expected cost is the sum of expected service costs plus expected
waiting costs.
Service costs are seen to increase as a firm attempts to raise its level of service. For example,
if three teams of stevedores, instead of two, are employed to unload a cargo ship, service
costs are increased by the additional price of wages. As service improves in speed, however, the
cost of time spent waiting in lines decreases. This waiting cost may reflect lost productivity of
workers while their tools or machines are awaiting repairs or may simply be an estimate of the
costs of customers lost because of poor service and long queues.