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79 terms

Chapter 11 / Chapter 3

STUDY
PLAY
arrival
customer arrivals are independent decisions not evenly spaced
capability
level of knowledge and skills vary resulting in some hand-holding
request
uneven service times result from unique demands
effort
level of commitment to coproduction or self-service varies
subjective preference
personal preferences introduce unpredictability
critical fractile
the cumulative probability of demand formed by the ratio of the cost of underestimating demand divided by the sum of the costs of underestimating demand and overestimating demand
chase demand
a strategy of adjusting capacity to match demand fluctuations
level capacity
a strategy of holding capacity fixed allowing for underutilization and some customer waiting
overbooking
taking reservations in excess of available capacity in anticipation of customer no shows
yield management
a comprehensive system to maximize revenue for capacity-constrained services using reservation systems, overbooking, and partitioning demand
a. demand is not from a homogeneous source
The strategy of segmenting demand is feasible only when
make off-peak usage attractive
The purpose of differential pricing is to
b. balance the expected opportunity cost of idle service capacity and expected cost of turning away customers who have reservations
A good overbooking strategy should
promoting off-peak demand
Bars that offer happy hours in the afternoon are using the strategy of
using part-time employees
Forecasting demand
Scheduling shifts
What are strategies for managing capacity
Capacity is relatively fixed.
The service is considered a perishable inventory.
Demand fluctuates yet is somewhat predictable.
What are characteristics of yield management?
forecast demand
convert to operator requirements
schedule shifts and assign oporaters to shifts
What is the order of daily work shift scheduling?
using reservations and appointments
Faced with variable demand and a perishable capacity, a service manager can smooth demand by
offering price incentives
developing reservation systems
partitioning demand
What are the strategies to manage demand?
promoting off-peak demand
A health club offering a reduced rate membership for students to workout before 4:00 p.m. on weekdays is
yield management
Several approaches to demand management exist, but only _______ seeks to maximize revenue.
ability to segment their market
perishable inventory
product sold in advance
Characteristics of firms using yield management
weekend and night rates for long-distance telephone calls
peak-load pricing by utility companies
an examples of the differential pricing policy
the number of no-shows based on past experience
In using the critical fractile criterion P(d<x) = Cu/(Cu + Co) for overbooking the 'd' refers to
Promotes off-peak demand
A restaurant that features special lunchtime combo meals is providing all but one of the following benefits?
RyerFirst
HIRO
Restaurant Catering Software
examples of yield management application:
demand
_________ variability is not one of the five sources of customer-induced variability
service qualifier
To be taken seriously a certain level must be attained on the competitive dimension, as defined by other market players. Examples are cleanliness for a fast food restaurant or safe aircraft for an airline.
service winner
The competitive dimension used to make the final choice among competitors. Example is price.
service loser
: Failure to deliver at or above the expected level for a competitive dimension. Examples are failure to repair auto (dependability), rude treatment (personalization) or late delivery of package (speed).
coding
grades customers on how profitable their business is
routing
is used by call centers to place customers in different queues based on customer code.
targeting
allows choice customers to have fees waived and get other hidden discounts
sharing
data about your transaction history with other firms is a source of revenue
data envelopment analysis
a linear programming technique that measures the performance of service units to determine an efficiency frontier for internal benchmarking
Differentiation
a competitive strategy that creates a service that is perceived as being unique
expert system
a computer program that can make inferences using a knowledge base and decision rules
five forces model
analysis of an industry structure considers competitive rivalry, new entrants, substitutes, and bargaining power of suppliers and customers
focus
a competitive strategy built around the concept of serving a particular target market very well by addressing the customers' specific needs
overall cost leadership
a competitive strategy based on efficient operations, cost control, and innovative technology
qualifiers
criteria used by a customer to create a subset of service firms meeting minimum performance requirements
strategic service vision
formulated by addressing questions about the target market, service concept, operating strategy, and delivery system
switching costs
inconvenience cost for the customer to switch to another provider
SWOT analysis
assesses a firm's strengths, weaknesses, opportunities, and threats
virtual value chain
stages in the customer relationship where information is gathered, organized, selected, synthesized, and distributed to create a virtual delivery platform
yield management
an information system that attempts to maximize revenue for services with time-perishable capacity (airlines, hotels)
Clark-Fisher hypothesis
a classification of economies according to the activity of the majority of the workforce
New experience economy
a stage of economic evolution in which added value is created by engaging and connecting with the customer in a personal and memorable way
industrial society
- a society dominated by factory work in mass-production industries
postindustrial society
a service society in which people are engaged in information, intellectual, or creative-intensive activities
preindustrial society
an agrarian society structured around farming and subsistence living
pull theory of innovation
service innovations that are driven by customer needs
push theory of innovation
- product innovations that originate in scientific laboratories
back office
- the service delivery activities not observable to the customer (restaurant kitchen)
explicit service
the essential or intrinsic features readily observable by the senses (on-time departure, quality of meal)
facilitating goods
material purchased or consumed by the buyer, or items provided by the consumer (food, golf clubs)
front office
the service delivery activities observable to the customer (dining area of a restaurant)
implicit services
psychological benefits or extrinsic features the customer may sense only vaguely (security of a well-lighted parking lot, privacy of a loan office)
service-dominant logic
is a view that all economies are service economies in which value is always co-created in the exchange of doing something for another party
service package
- five components describing a service: supporting facility, facilitating goods, information, explicit service, and implicit service
service process matrix
a classification of services based on the degree of interaction and customization and the degree of labor intensity that results in four categories: service factory, service shop, mass service, and professional service
service science
a field of study of the transfer and sharing of resources within and among service systems
servitization
- revenue enhancement by bundling service with sale of a product (financing new car sale)
Supporting facility - the physical resources that must be in place before a service can be offered (golf course, hospital building, airplane)
time
perishable capacity - a service that is not used during some period of time and, therefore, is lost forever (an empty seat on an airplane)
service loser
Failure to deliver at or above the expected level for a competitive dimension. Examples are failure to repair auto (dependability), rude treatment (personalization) or late delivery of package (speed).
service winner
The competitive dimension used to make the final choice among competitors. Example is price.
service qualifier
To be taken seriously a certain level must be attained on the competitive dimension, as defined by other market players. Examples are cleanliness for a fast food restaurant or safe aircraft for an airline.
Simultaneity
opportunities for personal selling, interaction creates customer perceptions of quality
perishability
cannot inventory, opportunity loss of idle capacity, need to match supply with demand
intangibility
creative advertising, no patent protection, importance of reputation
Heterogeneity
customer involvement in delivery process results in variability
Customer Participation in the Service Process
attention to facility design, opportunities for co-production, concern for customer and employee behavior
supporting facility
The physical resources that must be in place before a service can be sold. Examples are golf course, ski lift, hospital, airplane
facilitating goods
The material consumed by the buyer or items provided by the consumer. Examples are food items, legal documents, golf clubs, medical history
information
Operations data or information that is provided by the customer to enable efficient and customized service. Examples are patient medical records, seats available on a flight, customer preferences, location of customer to dispatch a taxi
information
internet
push theory
post-it
pull theory
cash management
changing demographics
Aging of the population Two-income families Growth in number of single people Home as sanctuary