MKT 723 Chapter Notes - Chapter 15: Shortage, Relate, Yield Management
14 May 2015
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Document Summary
Supply and demand in services is plagued by the inability to inventory services: this in combination with fluctuating demand leads to potential negative outcomes. The variations in outcomes are as follows: excess demand. Customers turned away and business opportunities lost: demand exceeds optimum capacity. Service quality suffers due to overuse, crowding, short staff: demand and supply are balanced at the level of optimum capacity. Staff and facilities are occupied at an ideal level: excess capacity. Productive resources underutilized lost productivity and lower profits. Time, labour, equipment, facilities: different services have variations in service constraints. Maximum use of capacity: optimum capacity means resources are being used at an ideal level and customers are receiving quality service in a timely manner, maximum capacity reps the limit of service availability. To manage fluctuating demand in a service business, its necessary to have an understanding of demand patterns.
