Balancing Demand and Productive Capacity
Balancing Demand and Productive Capacity
time
Demand exceeds optimum capacity
Upper limit to a firms ability to meet demand at a
given time
Optimum capacity
Point beyond which service quality declines as
time
Versus
Excess capacity
TIME CYCLE 2
possessions, or information
Labor used for physical or mental work
Public/private infrastructure
standees)
Vary seated space per customer Extend/cut hours of service Chase demand (adjust capacity to match demand) Flexible capacity (vary mix by segment)
demand Use part-time employees Rent or share extra facilities and equipment Ask customers to share Invite customers to perform self-service Cross-train employees
month
year other
incentives Vary product features to increase desirability More convenient delivery times and places
Parallel lines to multiple servers Designated lines to designated servers Single line to multiple servers (snake)
28 29 25 26 27 32 23 21 20 24
30 31
Criteria for Allocating Different Market Segments to Designated Lines Urgency of job
Emergencies versus non-emergencies
Importance of customer
Frequent users/high volume purchasers versus others
Benefits of Reservations
Controls and smoothes demand Pre-sells service Informs and educates customers in advance of arrival Saves customers from having to wait in line for service (if reservation times are honored) Data captured helps organizations
Prepare financial projections Plan operations and staffing levels
Deflects demand from unavailable first choices to alternative times and locations
Includes strategies for no-shows and overbooking
Requiring deposits to discourage no-shows Canceling unpaid bookings after designated time Compensating victims of over-booking