Optimal Time Allocation between Idle and Active Time

Abstract

Idle time is an essential and valuable factor in the production of any service. While idle time is necessary and helpful for efficient and effective utilization of time, it also has a negative effect that managers try to minimize. This paper illustrates either analytically or numerically the different effects of idle time on total net revenue. It first presents the case in which idle time is determined arbitrarily, and then shows idle time that has no direct negative effect on total revenue but a positive effect on the efficient use of active time.