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.
4 Understanding Capacity Constraints and Demand Patterns Time, labor, equipment, and facilitiesOptimal versus maximum use of capacityDemand PatternsCharting demand patternsPredictable cyclesRandom demand fluctuationsDemand patterns by market segment
7 Strategies for Shifting Demand to Match Capacity
8 Strategies for Adjusting Capacity to Match Demand
9 Challenges and Risks in Using Yield Management Loss of competitive focusCustomer alienationEmployee morale problemsIncompatible incentive and reward systemsLack of employee trainingInappropriate organization of the yield management function
10 Waiting Line Strategies Employ operational logicmodify operationsadjust queuing systemEstablish a reservation processDifferentiate waiting customersimportance of the customerurgency of the jobduration of the service transactionpayment of a premium priceMake waiting fun, or at least tolerable
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.