This paper considers methods for calculating the steady-state loss probability
in the GI/G/2/0 queue. A previous study analyzed this queue in discrete time
and this led to an efficient, numerical approximation scheme for continuous-time
systems. The primary aim of the present work is to provide an alternative approach by analyzing the GI/ME/2/0 queue; i.e., assuming that the service time
can be represented by a matrix-exponential distribution. An efficient computational scheme based on this method is developed and some numerical examples
are studied. Some comparisons are made with the discrete-time approach, and
the two methods are seen to be complementary.