diff --git a/src/opentau/policies/pi05/configuration_pi05.py b/src/opentau/policies/pi05/configuration_pi05.py
index 97a4327..e3bb7ed 100644
--- a/src/opentau/policies/pi05/configuration_pi05.py
+++ b/src/opentau/policies/pi05/configuration_pi05.py
@@ -116,6 +116,10 @@ class PI05Config(PreTrainedConfig):
     # Decoding
     num_steps: int = 10
 
+    # Real Time Inference
+    # maximum number of frozen actions
+    max_delay: int = 0
+
     # Initialization strategy
     init_strategy: Literal["no_init", "full_he_init", "expert_only_he_init"] = "full_he_init"
 
diff --git a/src/opentau/policies/pi05/modeling_pi05.py b/src/opentau/policies/pi05/modeling_pi05.py
index 169e7e4..5dc5b85 100644
--- a/src/opentau/policies/pi05/modeling_pi05.py
+++ b/src/opentau/policies/pi05/modeling_pi05.py
@@ -29,7 +29,7 @@
 import numpy as np
 import torch
 import torch.nn.functional as F  # noqa: N812
-from einops import rearrange
+from einops import rearrange, repeat
 from torch import Tensor, nn
 from transformers import AutoProcessor, AutoTokenizer
 
@@ -52,23 +52,23 @@ def create_sinusoidal_pos_embedding(
     """Computes sine-cosine positional embedding vectors for scalar positions.
 
     Args:
-        time: A 1-D tensor of shape (batch_size,).
+        time: A 2-D tensor of shape (batch_size, action_chunk_length).
         dimension: The dimension of the embedding vectors. Must be divisible by 2.
         min_period: The minimum period of the sinusoidal functions.
         max_period: The maximum period of the sinusoidal functions.
         device: The device to create the tensors on. Defaults to "cpu".
 
     Returns:
-        A tensor of shape (batch_size, dimension) containing the positional embeddings.
+        A tensor of shape (batch_size, action_chunk_length, dimension) containing the positional embeddings.
 
     Raises:
-        ValueError: If dimension is not divisible by 2 or if time tensor is not 1-D.
+        ValueError: If dimension is not divisible by 2 or if time tensor is not 2-D with shape (batch_size, action_chunk_length).
     """
     if dimension % 2 != 0:
         raise ValueError(f"dimension ({dimension}) must be divisible by 2")
 
-    if time.ndim != 1:
-        raise ValueError("The time tensor is expected to be of shape `(batch_size, )`.")
+    if time.ndim != 2:
+        raise ValueError("The time tensor is expected to be of shape `(batch_size, action_chunk_length)`.")
 
     dtype = (
         get_safe_dtype(torch.float64, device.type)
@@ -80,8 +80,8 @@ def create_sinusoidal_pos_embedding(
 
     # Compute the outer product
     scaling_factor = 1.0 / period * 2 * math.pi
-    sin_input = scaling_factor[None, :] * time[:, None]
-    pos_emb = torch.cat([torch.sin(sin_input), torch.cos(sin_input)], dim=1)
+    sin_input = rearrange(scaling_factor, "d -> 1 1 d") * rearrange(time, "b c -> b c 1")
+    pos_emb = torch.cat([torch.sin(sin_input), torch.cos(sin_input)], dim=2)
     return pos_emb
 
 
@@ -271,7 +271,7 @@ def __init__(
         self.normalize_targets = Normalize(
             config.output_features, config.normalization_mapping, dataset_stats
         )
-        self.normalize_actions = Normalize(
+        self.normalize_discrete_actions = Normalize(
             config.output_features, {"ACTION": NormalizationMode.MIN_MAX}, dataset_stats
         )
         self.unnormalize_outputs = Unnormalize(
@@ -525,9 +525,12 @@ def predict_action_chunk(self, batch: dict[str, Tensor]) -> Tensor:
     def select_action(self, batch: dict[str, Tensor], noise: Tensor | None = None) -> Tensor:
         """Select a single action given environment observations.
 
-        This method wraps `select_actions` in order to return one action at a time for execution in the
-        environment. It works by managing the actions in a queue and only calling `select_actions` when the
-        queue is empty.
+        This method uses an action queue that is replenished when it has config.max_delay or fewer actions (or is empty).
+        When replenishing, the current queue contents are used as action_prefix for sample_actions,
+        then the queue is refilled with the new chunk.
+
+        Note: This method should only be called when running a policy in simulation. For real world inference,
+        this method should be written in the ROS client node.
 
         Args:
             batch: Batch of data containing environment observations.
@@ -538,24 +541,58 @@ def select_action(self, batch: dict[str, Tensor], noise: Tensor | None = None) -
         """
         self.eval()
 
-        # Action queue logic for n_action_steps > 1. When the action_queue is depleted, populate it by
-        # querying the policy.
-        if len(self._action_queue) == 0:
-            actions = self.sample_actions(batch, noise=noise)
-            self._action_queue.extend(actions)
-        return self._action_queue.popleft()
+        if len(self._action_queue) == 0 or len(self._action_queue) <= self.config.max_delay:
+            # Use current queue as action prefix to replenish
+            action_prefix = None
+            delay = 0
+            if len(self._action_queue) > 0:
+                prefix_actions = list(self._action_queue)
+                delay = min(len(prefix_actions), self.config.max_delay)
+                assert delay == self.config.max_delay, f"Delay must be equal to {self.config.max_delay}"
+                prefix_actions = prefix_actions[-delay:]
+                action_prefix = torch.stack(prefix_actions, dim=1)
+                action_prefix = self.normalize_targets({"actions": action_prefix})["actions"]
+                original_action_dim = self.config.action_feature.shape[0]
+                if original_action_dim < self.config.max_action_dim:
+                    action_prefix = F.pad(
+                        action_prefix,
+                        (0, self.config.max_action_dim - original_action_dim),
+                    )
+                if delay < self.config.chunk_size:
+                    action_prefix = F.pad(
+                        action_prefix,
+                        (0, 0, 0, self.config.chunk_size - delay),
+                    )
+            actions = self.sample_actions(batch, noise=noise, action_prefix=action_prefix, delay=delay)
+            actions = rearrange(actions, "b c d -> c b d")
+            self._action_queue.extend(actions[delay:])
+            assert len(self._action_queue) == self.config.n_action_steps, (
+                f"Action queue must have {self.config.n_action_steps} actions"
+            )
+
+        action = self._action_queue.popleft()
+        return action
 
     @torch.no_grad()
-    def sample_actions(self, batch: dict[str, Tensor], noise: Tensor | None = None) -> Tensor:
+    def sample_actions(
+        self,
+        batch: dict[str, Tensor],
+        noise: Tensor | None = None,
+        action_prefix: Tensor | None = None,
+        delay: int = 0,
+    ) -> Tensor:
         """Sample actions from the policy given environment observations.
 
         Args:
             batch: Batch of data containing environment observations.
             noise: Optional noise tensor.
-
+            action_prefix: Optional action prefix tensor of shape (batch_size, action_chunk_length, action_dim).
+            delay: number of frozen delay actions from action_prefix.
         Returns:
-            The sampled actions tensor of shape (batch_size, action_dim).
+            The sampled actions tensor of shape (batch_size, action_chunk_length, action_dim).
         """
+        assert 0 <= delay <= self.config.max_delay, f"Delay must be between 0 and {self.config.max_delay}"
+
         batch = self.normalize_inputs(batch)
 
         images, img_masks = self.prepare_images(batch)
@@ -566,6 +603,8 @@ def sample_actions(self, batch: dict[str, Tensor], noise: Tensor | None = None)
             img_masks,
             lang_tokens,
             lang_masks,
+            action_prefix=action_prefix,
+            delay=delay,
             noise=noise,
         )
 
@@ -575,9 +614,6 @@ def sample_actions(self, batch: dict[str, Tensor], noise: Tensor | None = None)
 
         actions = self.unnormalize_outputs({"actions": actions})["actions"]
 
-        # `self.model.forward` returns a (batch_size, n_action_steps, action_dim) tensor, but the queue
-        # effectively has shape (n_action_steps, batch_size, *), hence the transpose.
-        actions = actions.transpose(0, 1)
         return actions
 
     def forward(
@@ -594,7 +630,7 @@ def forward(
             A dictionary containing the loss components ("MSE" and "CE").
         """
         batch = self.normalize_inputs(batch)
-        batch["discrete_actions"] = self.normalize_actions(dict(batch))["actions"]
+        batch["discrete_actions"] = self.normalize_discrete_actions(dict(batch))["actions"]
         batch = self.normalize_targets(batch)
 
         images, img_masks = self.prepare_images(
@@ -622,6 +658,7 @@ def forward(
             lang_tokens,
             lang_masks,
             actions,
+            actions_is_pad,
             response_tokens,
             response_masks,
             noise,
@@ -632,17 +669,8 @@ def forward(
 
         mse_loss = losses["MSE"]
         ce_loss = losses["CE"]
-        if actions_is_pad is not None:
-            in_episode_bound = ~actions_is_pad
-            mse_loss = mse_loss * in_episode_bound.unsqueeze(-1)
-
-        # Remove padding
-        mse_loss = mse_loss[:, :, : self.config.max_action_dim]
-
-        # For backward pass
-        loss = mse_loss.mean()
 
-        return {"MSE": loss, "CE": ce_loss}
+        return {"MSE": mse_loss, "CE": ce_loss}
 
     def prepare_discrete_state(self, batch: dict[str, Tensor]) -> list[str]:
         """Discretizes the state into bins and converts it to a string representation.
@@ -1048,7 +1076,7 @@ def embed_suffix(self, noisy_actions: Tensor, timestep: Tensor) -> tuple[Tensor,
 
         Args:
             noisy_actions: Tensor containing noisy actions.
-            timestep: Tensor containing timesteps.
+            timestep: Tensor containing timesteps of shape (batch_size, action_chunk_length).
 
         Returns:
             A tuple containing:
@@ -1107,6 +1135,7 @@ def forward(
         lang_tokens: Tensor,
         lang_masks: Tensor,
         actions: Tensor,
+        actions_is_pad: Tensor | None = None,
         response_tokens: Tensor | None = None,
         response_masks: Tensor | None = None,
         noise: Tensor | None = None,
@@ -1124,6 +1153,7 @@ def forward(
             response_tokens: Response language token tensor.
             response_masks: Response language mask tensor.
             actions: Action tensor.
+            actions_is_pad: Optional action is padded mask tensor.
             noise: Optional noise tensor.
             time: Optional time tensor.
             discrete_actions: Optional discrete action tensor.
@@ -1161,13 +1191,24 @@ def forward(
         )
 
         # Now run action expert
+        batch_size = actions.shape[0]
         if noise is None:
             noise = self.sample_noise(actions.shape, actions.device)
 
         if time is None:
-            time = self.sample_time(actions.shape[0], actions.device)
+            time = self.sample_time(batch_size, actions.device)
 
-        time_expanded = time[:, None, None]
+        # handle real time inference delay
+        delay = torch.randint(0, self.config.max_delay + 1, (batch_size,))
+        prefix_mask = rearrange(torch.arange(self.config.chunk_size), "c -> 1 c") < rearrange(
+            delay, "b -> b 1"
+        )
+        prefix_mask = prefix_mask.to(device=actions.device)
+        time = torch.where(
+            prefix_mask, 0, rearrange(time, "b -> b 1")
+        )  # using diffusion time 0 instead of flow matching time 1
+
+        time_expanded = rearrange(time, "b c -> b c 1")
         x_t = time_expanded * noise + (1 - time_expanded) * actions
         u_t = noise - actions
 
@@ -1206,7 +1247,28 @@ def forward(
         v_t = self.action_out_proj(suffix_out)
         v_t = v_t.to(dtype=torch.float32)
 
-        losses = F.mse_loss(u_t, v_t, reduction="none")
+        mse_loss = F.mse_loss(u_t, v_t, reduction="none")
+
+        # mask out frozen actions and padded actions
+        postfix_mask = rearrange(
+            torch.logical_not(prefix_mask), "b c -> b c 1"
+        )  # 0 for frozen actions, 1 for non-frozen actions
+
+        if actions_is_pad is not None:
+            in_episode_bound = ~actions_is_pad
+            in_episode_bound = rearrange(
+                in_episode_bound, "b c -> b c 1"
+            )  # 0 for padded actions, 1 for non-padded actions
+            postfix_mask = torch.logical_and(postfix_mask, in_episode_bound)
+
+        mse_loss = mse_loss * postfix_mask
+
+        # Remove padding
+        mse_loss = mse_loss[:, :, : self.config.max_action_dim]
+
+        # Do not include frozen actions and padded actions in the mean loss calculation
+        postfix_mask_expanded = repeat(postfix_mask, "b c 1 -> b c d", d=mse_loss.shape[-1])
+        mse_loss = mse_loss.sum() / (postfix_mask_expanded.sum() + 1e-8)
 
         # compute cross entropy loss for discrete actions
         batch_size, seq_len = discrete_actions.shape
@@ -1263,9 +1325,9 @@ def forward(
             # compute mean
             response_ce_loss = response_ce_loss.mean()
         else:
-            response_ce_loss = torch.tensor(0.0, device=losses.device)
+            response_ce_loss = torch.tensor(0.0, device=mse_loss.device)
 
-        return {"MSE": losses, "CE": discrete_action_ce_loss + response_ce_loss}
+        return {"MSE": mse_loss, "CE": discrete_action_ce_loss + response_ce_loss}
 
     def sample_actions(
         self,
@@ -1273,6 +1335,8 @@ def sample_actions(
         img_masks: list[Tensor],
         lang_tokens: Tensor,
         lang_masks: Tensor,
+        action_prefix: Tensor | None = None,
+        delay: int = 0,
         noise: Tensor | None = None,
     ) -> Tensor:
         """Do a full inference forward and compute the action.
@@ -1283,7 +1347,8 @@ def sample_actions(
             lang_tokens: Language token tensor.
             lang_masks: Language mask tensor.
             noise: Optional noise tensor.
-
+            action_prefix: Optional action prefix tensor.
+            delay: number of delay actions.
         Returns:
             The sampled action tensor.
         """
@@ -1347,18 +1412,26 @@ def sample_actions(
 
         x_t = noise
         time = torch.tensor(1.0, dtype=torch.float32, device=device)
+        prefix_mask = rearrange(torch.arange(self.config.chunk_size, device=device), "c -> 1 c") < delay
         while time >= -dt / 2:
-            expanded_time = time.expand(bsize)
+            # if delay is greater than 0, then freeze the action prefix at the beginning of action chunk
+            if delay > 0:
+                x_t = torch.where(rearrange(prefix_mask, "b c -> b c 1"), action_prefix, x_t)
+            masked_time = torch.where(prefix_mask, 0, time)
             v_t = self.denoise_step(
                 prefix_pad_masks,
                 past_key_values,
                 x_t,
-                expanded_time,
+                masked_time,
             )
 
             # Euler step
             x_t += dt * v_t
             time += dt
+
+        # we need to ensure the frozen actions are not modified before returning the denoised actions
+        if delay > 0:
+            x_t = torch.where(rearrange(prefix_mask, "b c -> b c 1"), action_prefix, x_t)
         return x_t
 
     def denoise_step(
@@ -1366,7 +1439,7 @@ def denoise_step(
         prefix_pad_masks: Tensor,
         past_key_values: list[dict[str, Tensor]],
         x_t: Tensor,
-        timestep: Tensor,
+        time: Tensor,
     ) -> Tensor:
         """Apply one denoising step of the noise `x_t` at a given timestep.
 
@@ -1374,12 +1447,11 @@ def denoise_step(
             prefix_pad_masks: Prefix padding masks.
             past_key_values: Past key values from the VLM.
             x_t: Current noise tensor.
-            timestep: Current timestep.
-
+            time: Time tensor of shape (batch_size, action_chunk_length).
         Returns:
             The predicted velocity tensor (v_t).
         """
-        suffix_embs, suffix_pad_masks, suffix_att_masks, adarms_cond = self.embed_suffix(x_t, timestep)
+        suffix_embs, suffix_pad_masks, suffix_att_masks, adarms_cond = self.embed_suffix(x_t, time)
 
         num_cross_att_tokens = prefix_pad_masks.shape[1]
         action_expert_2d_attention_mask = make_att_2d_masks(
diff --git a/src/opentau/scripts/grpc/server.py b/src/opentau/scripts/grpc/server.py
index c1e4832..3637254 100644
--- a/src/opentau/scripts/grpc/server.py
+++ b/src/opentau/scripts/grpc/server.py
@@ -189,9 +189,9 @@ def GetActionChunk(
             # Run inference
             with torch.inference_mode():
                 action_chunk = self.policy.sample_actions(batch)
-                # action_chunk shape: (n_action_steps, batch_size=1, action_dim)
+                # action_chunk shape: (batch_size=1, n_action_steps, action_dim)
                 # Remove batch dimension and convert to numpy
-                action_chunk = action_chunk.squeeze(1).to("cpu", torch.float32).numpy()
+                action_chunk = action_chunk.squeeze(0).to("cpu", torch.float32).numpy()
 
             # Populate 2D action chunk structure
             for action_vector in action_chunk:
diff --git a/src/opentau/utils/transformers_patch.py b/src/opentau/utils/transformers_patch.py
index 8913ecc..08ccbf4 100644
--- a/src/opentau/utils/transformers_patch.py
+++ b/src/opentau/utils/transformers_patch.py
@@ -155,9 +155,6 @@ def forward(
             raise ValueError(f"Expected cond dimension {self.cond_dim}, got {cond.shape[-1]}")
 
         modulation = self.dense(cond)
-        # Reshape modulation to broadcast properly: [batch, 1, features] for [batch, seq, features]
-        if len(x.shape) == 3:  # [batch, seq, features]
-            modulation = modulation.unsqueeze(1)
 
         scale, shift, gate = torch.chunk(modulation, 3, dim=-1)