CHAPTER 9 - BALANCING DEMAND

• Demand - The amount of need of certain products or goods for consumption
• Service Industry - it implies to the quantity of services that are required from the firms
• Yield Management - also known as revenue management
• Facilities - resources that pertain to handling of customers to store goods and services
• Labor - refers to human elements that manipulate the process
• Single line to multiple servers - type of queue known as snake
• Balanced Demand and Supply at Optimum Capacity - ideal situation for both organization and customers
• Random Demand Fluctuations - weather condition of an area
• Demand Patterns by Market Segment - analysis of the profile of an organization customer
• Price - Use price and nonmonetary cost to manage demand
• Product - Change product elements
• Place - Modify place and time of delivery
• Promotion - promotion and education
• Optimal Capacity - fully utilized but not overused
• Maximum Capacity - fully utilized, leading to customer dissatisfaction
• Time - primary constraints
• Labor - critical constraint
• Equipment - critical for those dependent on machineries
• Facilities - such as rooms, bath areas and tables also limit the capacity
• Strategies in Modifying Demand to Match Existing Capacity - Communicate with customers, Modify Timing and Location of service delivery, Offer incentives for Off peak usage, Set priorities, Charge Full Price
• Strategies in Adjusting Capacity to Meet Demand - Increase capacity temporarily, Adjust use of resources, Increase demand to match Capacity
• Increase Capacity Temporarily - Extend people, use part time employees, Cross training employees, Outsource activities, Rent or Share
• Adjust use of resources - Schedule downtime, Perform maintenance, Schedule vacations, Modify facilities, Perform Self service, Ask customers to share, Create flexibility Capacity
• Chase demand strategy - aims to modify service resources to go after the demand curve
• Increase Demand to Match Capacity - Educate Customers, Convert how the facility is Used, Modify the service offering, Differentiate on Price
• Productive Capacity - resources or assets that organization utilize to manufacture goods and render services
• Equipment - important element of capacity
• Infrastructure - public and private structures