CHAPTER 9

Question 1

This term refers to the resources or assets that a firm can use to create goods and services that are typically key cost components and therefore need to be managed carefully.

Answer 1

PRODUCTIVE SERVICE CAPACITY.

Question 2

FIVE PRODUCTIVE CAPACITY IN SERVICES

Answer 2

1. Physical facilities to contain customers.
2. Physical facilities to store or process goods.
3. Physical equipment to process people, possessions, or information
4. Labor used for physical or mental work.
5. Public/private infrastructure.

Question 3

Four conditions potentially faced by fixed-capacity services:

Answer 3

1. EXCESS DEMAND
2. DEMAND EXCEEDS OPTIMUM CAPACITY
3. DEMAND AND SUPPLY ARE WELL BALANCED AT THE LEVEL OF OPTIMUM CAPACITY.
4. EXCESS CAPACITY

Question 4

The level of demand exceeds the maximum available capacity, resulting in some customers being denied service and business is lost.

Answer 4

EXCESS DEMAND

Question 5

No one is turned away, but conditions are crowded and customers are likely to perceive a deterioration in service quality and may feel dissatisfied.

Answer 5

DEMAND EXCEED OPTIMUM CAPACITY

Question 6

:Staff and facilities are busy without being overworked, and customers receive good service without delays.

Answer 6

DEMAND AND SUPPLY ARE WELL BALANCED AT THE LEVEL OF OPTIMUM CAPACITY.

Question 7

Demand is below optimum capacity and productive resources and underutilized, resulting in low productivity.

Answer 7

EXCESS CAPACITY

Question 8

ADDRESSING THE PROBLEM OF FLUCTUATING DEMAND
Two basic approaches:

Answer 8

1. ADJUST THE LEVEL OF CAPACITY TO MEET DEMAND:
2. MANAGE THE LEVEL OF DEMAND:

Question 9

This approach requires an understanding of what constitutes productive capacity and how it may increase or decrease on an incremental basis.

Answer 9

ADJUST THE LEVEL OF CAPACITY TO MEET DEMAND

Question 10

This requires a good understanding of demand patterns and drivers on a segment-by-segment basis, so that firms can use marketing strategies to smooth out variations in demand.

Answer 10

MANAGE THE LEVEL OF DEMAND

Question 11

STRETCHING CAPACITY LEVELS

Answer 11

1. ELASTIC CAPACITY
2. UTILIZE THE FACILITIES FOR LONGER PERIODS
3. REDUCED THE AVERAGE AMOUNT OF TIME CUSTOMERS (OR THEIR POSSESSIONS) SPEND IN THE PROCESS

Question 12

Ability to absorb extra demand

Answer 12

ELASTIC CAPACITY

Question 13

The actual capacity level remains unchanged, and more people are being served with the same capacity.

Answer 13

ELASTIC CAPACITY

Question 14

Some banks extend their opening hours during weekdays and even open weekends. Universities may offer evening classes, and weekend and summer programs.

Answer 14

UTILIZE THE FACILITIES FOR LONGER PERIODS

Question 15

ADJUSTING CAPACITY TO MATCH DEMAND

Answer 15

1. Schedule downtime during periods of low demand.
2. Cross-train employees
3. Use part-time employees
4. Invite customers to perform self-service
5. Ask customers to share
6. Create flexible capacity
7. Rent or share extra facilities and equipment.

Question 16

ANALYZING DRIVERS OF DEMAND

Answer 16

1. Understand why customers from specific market segment select this service
2. Keep good records of transactions to analyze demand patterns. (Sophisticated software can help track customer consumption patterns)
3. Record weather conditions and other special factors that might influence demand.

Question 17

STRATEGIES TO MANAGE DEMAND
FIVE BASIC APPROACHES TO MANAGING DEMAND:

Answer 17

1. Take no action and leave demand to find its own levels.
2. Reduce demand during peak periods.
3. Increase demand during low periods.
4. Inventory demand using a queuing system
5. Inventory demand using a reservations system

Question 18

are intended to guarantee that service will be available when the customer wants it.

Answer 18

RESERVATIONS

Question 19

BENEFIT OF RESERVATIONS:

Answer 19

1. Customer dissatisfaction due to excessive waits can be avoided
2. Allow demand to be controlled and smoothed out in a more manageable way
3. Enable the implementation of revenue management and serve to pre-sell a service to different customer segments
4. Data from reservation systems also help organizations prepare operational and financial projections for future periods.

Question 20

UNIVERSAL PHENOMENON

Answer 20

WAITING

Question 21

Something that occurs everywhere

Answer 21

WAITING

Question 22

occur whenever the number of arrivals at a facility exceed the capacity of the system to process them.

Answer 22

QUEUES

Question 23

INVENTORY DEMAND THROUGH WAITING LINES AND QUEUING SYSTEMS
Demand can be inventoried in two ways:

Answer 23

1. By asking customers to wait in line:
2. By offering customers the opportunity to reserve

Question 24

MANAGING WAITING LINES

Answer 24

1. Rethinking the design of the queuing system
2. Tailoring the queuing system to different market segments
3. Managing customers’ behavior and their perceptions of the wait
4. Installing a reservation system
5. Redesigning processes to shorten the time of each transaction

Question 25

DIFFERENT QUEUE CONFIGURATIONS

Answer 25

SINGLE LINE SINGLE SERVER SINGLE STAGE: SINGLE LINE SEQUENTIAL STAGES PARALLEL LINES TO MULTIPLE SERVERS: SINGLE LINE TO MULTIPLE SERVERS DESIGNATED LINES TAKING A NUMBER

Question 26

Customers proceed and transact through a single serving operation.

Answer 26

SINGLE LINE SINGLE SERVER SINGLE STAGE

Question 27

Customers proceed through several serving operations. Bottlenecks may occur at any stage where the process takes longer to execute than at previous stages.

Answer 27

SINGLE LINE SEQUENTIAL STAGES

Question 28

Offer more than one serving station, allowing customers to select one of several lines in which to wait.

Answer 28

PARALLEL LINES TO MULTIPLE SERVERS

Question 29

Banks and ticket windows are common examples

Answer 29

PARALLEL LINES TO MULTIPLE SERVERS

Question 30

Commonly known as a “snake”.

Answer 30

SINGLE LINE TO MULTIPLE SERVERS

Question 31

This type of waiting line solves the problem of parallel lines to multiple servers moving at different speeds.

Answer 31

SINGLE LINE TO MULTIPLE SERVERS

Question 32

This method is commonly used to post offices and airport check-ins.

Answer 32

SINGLE LINE TO MULTIPLE SERVERS

Question 33

Involve assigning different lines to specific categories of customers.

Answer 33

DESIGNATED LINES

Question 34

Saves customers the need to stand in a queue. This procedure allows them to sit down and relax, or to guess how long the wait will be and do something else in the meantime.

Answer 34

TAKING A NUMBER

Question 35

TEN PREPOSITIONS ON THE PSYCHOLOGY OF WAITING LINES

Answer 35

1. Unoccupied time feels longer than occupied time. 2. Solo waits feel longer than group waits. 3. Physically uncomfortable waits fell longer than comfortable waits. 4. Pre-and post-process waits feel longer than in-process waits. 5. Unfair waits are longer than equitable waits. 6. Unfamiliar waits seem longer than familiar ones. 7. Uncertain waits are longer than known, finite waits. 8. Unexplained waits are longer than explained waits. 9. Anxiety makes waits seem longer. 10. The more valuable or important the service, the longer people will wait.