BMA258 (week 11)Lect 9 Capacity and Demand Management.pptxVIP

BMA258 Services marketingLecture Nine Capacity and Demand Management Learning Outcomes By the end of this lecture you should be able to: Outline and discuss the importance of service delivery processes. Discuss the role of blueprinting in process design. Identify the impact of the customer as a co-producer on service delivery processes. Outline and discuss the strategies for demand and capacity management in service industries. Discuss the purpose of yield management. Outline and discuss the use of reservation and queuing systems in demand and capacity management. Demand and Capacity Management. Many services are perishable and cannot be inventoried. Many services experience wide swings in demand – sometimes referred to as seasonality. Problem most common in people and possession processing services. Effective use of productive capacity is one of the secrets to success. People processing services - tangible acts directed at people (haircut, aviation). Possession processing - tangible acts directed at possessions (freight, repairs). Mental stimulus processing - intangible acts directed at people (education, consulting). Information processing - - intangible acts directed at possessions (accounting, insurance). Value Effects of Service Capacity Management Capacity Gap Unable to serve customers Worse service quality Lost revenue Demand Gap Sunk costs Dissatisfaction Revenues Value Costs Relating Demand to Capacity:Four Key Concepts . Excess demand: too much demand relative to capacity at a given time. Excess capacity: too much capacity relative to demand at a given time. Maximum capacity: upper limit to a firm’s ability to meet demand at a given time. Optimum capacity: point beyond which service quality declines as more customers are serviced. Variations in Demand Relative to Capacity Capacity/Demand Gaps DEMAND RELATED DETERMINANTS Demand Level Demand Dynamics Patterns Accidental CAPACITY RELATED DETERMINANTS Adaptability of Services Resources Capacit