Waiting Line Strategies When Demand and Capacity Cannot Be Matched
2 Figure 2.6Gaps Model of Service Quality Expected Service CUSTOMER Customer Gap Perceived Service External Communications to Customers COMPANY Service Delivery Gap 4 Gap 3 Customer-Driven Service Designs and Standards Gap 1 Gap 2 Company Perceptions of Consumer Expectations 3 Figure 15.1Variations in Demand Relative to Capacity Source C. Lovelock Getting the Most Out of Your Productive Capacity in Product Plus (Boston McGraw Hill 1994) chap. 16 p. 241. 4 Understanding Capacity Constraintsand Demand Patterns Demand Patterns Capacity Constraints
Time labor equipment and facilities
Optimal versus maximum use of capacity
Charting demand patterns
Random demand fluctuations
Demand patterns by market segment
5 Table 15.1Demand versus Supply Source C. H. Lovelock Classifying Services to Gain Strategic Marketing Insights Journal of Marketing 47 (Summer 1983) 17. 6 Table 15.2 Constraints on Capacity 7 Figure 15.3Strategies for Shifting Demand to Match Capacity Demand Too High Demand Too Low Shift Demand
Use sales and advertising to increase business from current market segments.
Modify the service offering to appeal to new market segments.
Offer discounts or price reductions.
Modify hours of operation.
Bring the service to the customer.
Use signage to communicate busy days and times.
Offer incentives to customers for usage during nonpeak times.
Take care of loyal or regular customers first.
Advertise peak usage times and benefits of nonpeak use.
Charge full price for the serviceno discounts.
8 Figure 15.4Strategies for Adjusting Capacity to Match Demand Demand Too High Demand Too Low
Perform maintenance renovations.
Schedule employee training.
Lay off employees.
Stretch time labor facilities and equipment.
Hire part-time employees.
Request overtime work from employees.
Rent or share facilities.
Rent or share equipment.
Subcontract or outsource activities.
9 Challenges and Risks in UsingYield Management
Loss of competitive focus
Employee morale problems
Incompatible incentive and reward systems
Lack of employee training
Inappropriate organization of the yield management function
10 Waiting Line Strategies
Employ operational logic
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 Issues to Consider in Making WaitingMore 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 Figure 15.6Waiting Line Configurations Source J. A. Fitzsimmons and M. J. Fitzsimmons Service Management 4th ed. (New York Irwin/McGraw-Hill 2004) chap. 11 p. 296.
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