Distinct Characteristics of Service and How to Manage Demand and Supply

Question 1

How many distinct characteristics of service are there?

Answer 1

4

• Intangibility
• Inseparability
• Variability
• Perishability

Question 2

Intangibility

Answer 2

You cannot see, touch, feel, taste, smell, or compare

Question 3

Inseparability

Answer 3

Must be produced and consumed at the same time

• The service provider and customer must be present when the service is performed

Question 4

Variability

Answer 4

The service provided by different people can vary depending on their level of experience

Question 5

Perishability

Answer 5

Cannot be stored in inventory, they become perishable

• Service providers have a finite number of hours that they can operate with the people they employ
• Customer demand for services will fluctuate

Question 6

Managing Demand (with customers)

Answer 6

• offer differential pricing to entice customers to shift their demand to off-peak times when they take advantage of that demand
• offer complementary services
• offer a reservation system to reserve a spot when there is availability and have the customer arrive at that time

Question 7

Managing Supplies (with employees)

Answer 7

• hiring part-time employees to deal with the fluctuations in demand
• having employees focus on critical service aspects during peak times and address non-critical aspects during non-peak times
• Encouraging customers to participate in the service delivery to address demand issues