Demand and capacity in services Flashcards
What is Provider Gap 3?
Delivery Gap: Discrepancy between development of customer-driven service standards and actual service performance by employees.
Define demand in the context of services.
Quantity of goods and services demanded by customers.
What is capacity?
Maximum goods or services that an operation can produce.
What is a forecast?
Predicting the future normally based on historical data with some interpretation.
Why is perishability a challenge for service providers?
Services can’t be stored for future use, leading to lost revenue if capacity is not met.
What happens to an empty seat on a flight or in a movie theatre?
It is considered lost revenue once the flight/showtime passes.
How can demand for services vary?
By time, such as holidays, weekends, and rush hours.
What is a significant issue for businesses without inventory?
They can’t easily smooth out supply during high-demand periods.
What does intangibility mean in services?
Services are not physical items that can be stored.
What is a strategy for increasing capacity when demand is too high?
Stretch time, labour, facilities, and equipment in the short run.
What is a risk associated with stretching capacity?
Quality of service may decrease.
How can hiring part-time employees help during high demand?
Adds flexibility to the labour force and is cost-effective.
What is the benefit of cross-training employees?
Increases labour flexibility and reduces bottlenecks making the supply chain more efficient.
What is a quick way to boost output during high demand?
Request overtime from employees.
What is the purpose of outsourcing activities?
Frees up internal resources to focus on core services.
What are strategies for when demand is too low?
- Perform maintenance or renovations.
- Schedule vacations
- employee training
- Lay off employees
How can scheduling vacations help during low demand?
Reduces idle labour costs and ensures full staffing during busy periods.
What is the benefit of scheduling employee training during low demand?
Keeps staff productive and improves quality of service.
What is a drastic response to sustained low demand?
Lay off employees.
How can demand patterns be identified?
By charting level of demand over relevant periods of time.
What is a strategy for managing high demand by changing customer behavior?
Communicate busy days and times to customers.
What is a method to modify service delivery timing?
Change the time or location of services.
What incentive can be offered for non-peak usage?
Lower prices.
