Which theory helps in resource allocation by predicting demand?

Queueing Theory is particularly valuable in predicting demand as it focuses on the behavior of wait lines or queues. This theory applies mathematical models to analyze the process of waiting and helps organizations understand how resources can be allocated based on anticipated demand. By modeling how customers arrive, how long they stay, and the service rates, organizations can make informed decisions about how many resources to allocate, whether that be staffing levels, inventory levels, or facility capacity.

This predictive capability is crucial in various sectors, like telecommunications, healthcare, and retail, where understanding peak times can lead to more efficient resource distribution and enhanced customer satisfaction. The insights from Queueing Theory help managers optimize operations by minimizing wait times while effectively utilizing available resources, thereby addressing demand fluctuations seamlessly.

The other choices do not primarily focus on demand prediction in the same way Queueing Theory does. Inventory Analysis centers on managing stock levels; Network Models are used for logistics and mapping out connections, while Prospect Theory relates to behavioral economics and decision-making under risk, rather than resource allocation based on demand.