FINALS WEEK 3 Flashcards
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.
PRODUCTIVE SERVICE CAPACITY
In a service context, productive capacity can take
several forms, including facilities ,equipment, labor,
and infrastructure.
PRODUCTIVE SERVICE CAPACITY
Five Productive Capacity in Services
- Physical facilities to contain customers
- Physical facilities to store or process goods
- Physical equipment to process people, possessions, or information
- Labor used for physical or mental work
- Public/private infrastructure
Four conditions potentially faced by fixed-capacity services:
- Excess demand
- Demand exceeds optimum capacity
- Demand and supply are well balanced at the level of optimum capacity
- Excess capacity
The level of demand exceeds the maximum available
capacity, resulting in some customers being denied service and business is lost.
Excess demand.
No one is turned away, but conditions
are crowded and customers are likely to perceive a deterioration in service quality
and may feel dissatisfied.
Demand exceeds optimum capacity
Staff and facilities are busy without being overworked, and customers receive
good service without delays.
Demand and supply are well balanced at the level of optimum capacity
Demand is below optimum capacity and productive
resources are underutilized, resulting in low productivity
Excess capacity
ADDRESSING THE PROBLEM OF FLUCTUATING
DEMAND
Two basic approaches:
- Adjust the level of capacity to meet demand.
- Manage the level of demand.
This approach requires
an understanding of what constitutes productive capacity and how it may
be increased or decreased on an incremental basis.
Adjust the level of capacity to meet demand.
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.
Manage the level of demand.
Most service firms use a mix of both approaches. What is that approach?
-Adjust the level of capacity to meet demand.
-Manage the level of demand.
(ability to absorb extra demand)
Elastic Capacity
The actual capacity level remains
unchanged, and more people are being served with the same capacity
Elastic Capacity
In other instances, it may be achieved by cutting back the level of service — say,
offering a simpler menu at busy times of the day.
Reduced the average amount of time customers (or their possessions) spend in
the process.
STRETCHING CAPACITY LEVELS
-Elastic Capacity
-Utilize the facilities for longer periods
-Reduced the average amount of time customers (or their possessions) spend in
the process
ADJUSTING CAPACITY TO MATCH DEMAND
- Schedule downtime during periods of low demand
- Cross-train employees
- Use part-time employees
- Invite customers to perform self-service
- Ask customers to share
- Create flexible capacity
- Rent or share extra facilities and equipment
Five basic approaches to managing demand:
- Take no action and leave demand to find its own levels.
. Reduce demand during peak periods. - Increase demand during low periods.
- Inventory demand using a queuing system.
- Inventory demand using a reservations system.
are intended to guarantee that service will be available when
the customer wants it.
Reservations
Customer dissatisfaction due to excessive waits can be avoided
(T or F)
t
It allow demand to be controlled and smoothed out in a more manageable way
Reservation
It enable the implementation of revenue management and serve to pre-sell a service to different customer segments
Reservation
Data from _____________ also help organizations prepare operational and financial projections for future periods
reservation systems
something that occurs everywhere
Waiting
Waiting for lines known to operations researchers as ________
Queues
occur whenever the number of arrivals at a facility exceeds the capacity of the system to process them
Queues
It’s boring, time-wasting, and sometimes physically uncomfortable
Waiting
Demand can be inventoried in two ways:
- By asking customers to wait in line.
- By offering customers the opportunity to reserve
MANAGING WAITING LINES
- Rethinking the design of the queuing. 2. Tailoring the queuing system to different market segments. 3. Managing customers’ behavior and their perceptions of the wait. 4. Installing a reservations system. 5. Redesigning processes to shorten the time of each transaction
DIFFERENT QUEUE CONFIGURATIONS
-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
Customers proceed and transact through a single serving operation
Single line single server single stage.
Customers proceed through several serving operations.
Single line sequential stages
______ may occur at any stage where the process takes longer to execute than at previous stages.
Bottlenecks
Offer more than one serving station, allowing customers to select one of several lines in which to wait. Banks and ticket windows are common examples.
Parallel lines to multiple servers
Commonly known as a “snake.”
Single line to multiple servers
This type of waiting line solves the problem of parallel lines to multiple servers moving at different speeds. This method is commonly used at post offices and airport check-ins.
Single line to multiple servers
Involve assigning different lines to specific categories of customers
Designated lines
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
Taking a number
TEN PREPOSITIONS ON THE PSYCHOLOGY OF WAITING LINES
- Unoccupied time feels longer than occupied time.
- Solo waits feel longer than group waits
- Physically uncomfortable waits feel longer than comfortable waits
- Pre-and post-process waits feel longer than in-process waits
- Unfair waits are longer than equitable waits
- Unfamiliar waits seem longer than familiar ones
- Uncertain waits are longer than known, finite waits
- Unexplained waits are longer than explained waits
- Anxiety makes waits seem longer
- The more valuable or important the service, the longer people will wait.
To manage demand effectively, firms need to understand demand patterns and drivers by market segment. Different segments often exhibit different demand patterns (T or F)
t
Once firms have an understanding of the demand patterns of their market segments, they can use marketing strategies to reshape those patterns. (T or F)
t
To understand the patterns of demand by segment, research should begin by getting some answers to a series of important questions about the patterns of demand and their underlying causes. (T or F?)
t
ANALYZING DRIVERS OF DEMAND
- Understand why customers from specific market segments select this service.
- Keep good records of transactions to analyze demand patterns.
- Record weather conditions and other special factors that might influence demand.
