Presentation is loading. Please wait.

Presentation is loading. Please wait.

15-1 Managing Demand and Capacity  The Underlying Issue: Lack of Inventory Capability  Capacity Constraints  Demand Patterns  Strategies for Matching.

Similar presentations


Presentation on theme: "15-1 Managing Demand and Capacity  The Underlying Issue: Lack of Inventory Capability  Capacity Constraints  Demand Patterns  Strategies for Matching."— Presentation transcript:

1 15-1 Managing Demand and Capacity  The Underlying Issue: Lack of Inventory Capability  Capacity Constraints  Demand Patterns  Strategies for Matching Capacity and Demand  Yield Management: Balancing Capacity Utilization, Pricing, Market Segmentation, and Financial Return  Waiting Line Strategies: When Demand and Capacity Cannot Be Matched Chapter15 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

2 15-2 Objectives for Chapter 15: Delivering Service Through Intermediaries  Explain the underlying issue for capacity-constrained services: lack of inventory capability.  Present the implications of time, labor, equipment, and facilities constraints combined with variations in demand patterns.  Lay out strategies for matching supply and demand through (a) shifting demand to match capacity or (b) adjusting capacity to meet demand.  Demonstrate the benefits and risks of yield management strategies in forging a balance among capacity utilization, pricing, market segmentation, and financial return.  Provide strategies for managing waiting lines for times when capacity and demand cannot be aligned.

3 15-3 Variations in Demand Relative to Capacity

4 15-4 Understanding Capacity Constraints and Demand Patterns Capacity Constraints  Time, labor, equipment, and facilities  Optimal versus maximum use of capacity Demand Patterns  Charting demand patterns  Predictable cycles  Random demand fluctuations  Demand patterns by market segment

5 15-5 Demand and Capacity for Service Providers

6 15-6 Constraints on Capacity

7 15-7 Strategies for Shifting Demand to Match Capacity

8 15-8 Strategies for Adjusting Capacity to Match Demand

9 15-9 Challenges and Risks in Using Yield Management  Loss of competitive focus  Customer alienation  Employee morale problems  Incompatible incentive and reward systems  Lack of employee training  Inappropriate organization of the yield management function

10 15-10 Waiting Line Strategies  Employ operational logic  modify operations  adjust queuing system  Establish a reservation process  Differentiate waiting customers  importance of the customer  urgency of the job  duration of the service transaction  payment of a premium price  Make waiting fun, or at least tolerable

11 15-11 Issues to Consider in Making Waiting More Tolerable  Unoccupied time feels longer than occupied time.  Preprocess waits feel longer than in-process waits.  Anxiety makes waits seem longer.  Uncertain waits seem longer than known, finite waits.  Unexplained waits seem longer than explained waits.  Unfair waits feel longer than equitable waits.  The more valuable the service, the longer the customer will wait.  Solo waits feel longer than group waits.

12 15-12 Waiting Line Configurations


Download ppt "15-1 Managing Demand and Capacity  The Underlying Issue: Lack of Inventory Capability  Capacity Constraints  Demand Patterns  Strategies for Matching."

Similar presentations


Ads by Google