Deck 14: Coping With Fluctuating Demand for Services

Question 1

Insufficient demand for a service offering may be the result of the firm's excess service capacity.

Answer 1

True

Question 2

Service organizations often do not experience predictable or manageable fluctuations of demand.

Answer 2

False

Question 3

To get an accurate picture of the overall demand,service organizations must chart the patronage patterns of the segments for the service product together.

Answer 3

True

Question 4

A service organization may chase demand with capacity by stretching or shrinking its productive capacity to meet fluctuating demand.

Question 5

Random fluctuation in service demand can be easily managed.

Question 6

Once service demand patterns are discovered;the next step for service providers who are interested in shifting consumer demand is to use this strategy as a basis for developing appropriate service strategies.

Question 7

Demand cycles and perishability are two demand circumstances that nearly all service organizations face.

Question 8

Service organizations should never try to balance service capacity and demand by influencing or changing the nature of customer demand.

Question 9

Stretching capacity involves a temporary adjustment that does not result in a permanent,long-term increase in capacity resources.

Question 10

Smoothing demand means shifting patronage to times when a service's productive capacity is underused and deflecting or discouraging patronage when it is oversubscribed.

Question 11

Excess demand for a service offering may result from insufficient service capacity available to the service provider.

Question 12

Few service organizations may be characterized as capacity-constrained services.

Question 13

Service organizations often face the challenge of balancing capacity and demand,rather than simply creating it.

Question 14

Service organizations may employ any of the elements of the traditional marketing mix to increase or decrease demand for its services at times when patronage is low or high.

Question 15

Chasing demand by stretching capacity is always a good idea.

Question 16

Demand that falls short of capacity makes that capacity a wasted resource.

Question 17

The key for any service organization is to strike a balance between capacity and demand.

Question 18

To chase demand successfully,a service organization must first acquire an accurate understanding of the demand cycle for its service offering.

Question 19

Almost all services have distinct patterns of behavior that can be traced to specific causes.

Question 20

Service organizations should use a smoothing demand approach to encourage patronage when the firm's capacity is oversubscribed.

Question 21

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
Once ___________ fluctuations in demand are uncovered and understood,appropriate demand balancing service strategies can be developed.

Question 22

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
___________ fluctuations in demand occur without warning and cannot be easily managed.

Question 23

Achieving maximum capacity does not have negative consequences for the service organization or its customers.

Question 24

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
___________ demand refers to a process of expanding or reducing the organization's productive capacity to meet fluctuating demand.

Question 25

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
____________ refers to the service organization's physical facilities,personnel,and equipment.

Question 26

Which of the following is not considered a principle of waiting?

A)Empty minutes are long minutes.
B)Unknown minutes are shorter.
C)Waits for valued outcomes seem shorter.
D)Overpromising shortens reasonable waits.
E)In-process minutes are shorter.

Question 27

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
A firm's ___________ capacity is dictated by the size of its facilities,the number of and skill level of its personnel,and the nature of its equipment.

Question 28

Which of the following is NOT a benefit of a reservation system for controlling demand for a service offering?

A)A reservation system allows a service organization to identify customer demand before the actual time in which it will occur.
B)A reservation system allows a service organization to organize customer demand before the actual time in which it will occur.
C)A reservation system assures customers that they will receive the service they want at a specified time.
D)All of these are benefits associated with the use of reservation systems for controlling demand.
E)None of these are benefits associated with the use of reservation systems for controlling demand.

Question 29

Which,if any,of the following approaches is (are)NOT recommended for controlling demand without increasing capacity or shifting demand?

A)Establish a reservation system.
B)Establish a formal queuing system.
C)Do nothing.
D)All of these are recommended approaches for balancing customer demand.
E)None of these are recommended approaches for balancing customer demand.

Question 30

Which of the following circumstances is NOT at the heart of the services demand problem?

A)Services must cope with the ebbs and flows of consumer demand.
B)Services must cope with their capacity to provide consumers with a service.
C)Services must cope with incompatible product offerings.
D)Both A and B are at the heart of the services demand problem
E)A,B,and C are at the heart of the service demand problem.

Question 31

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
A firm's ___________ capacity is the number of customers that can be effectively handled under the best of conditions.

Question 32

Optimum capacity refers to the number of customers who can be effectively handled under ideal conditions.

Question 33

Since demand cycles often make waiting time an uncommon occurrence;service organizations need not worry about finding ways to make the customers' waiting experience more tolerable.

Question 34

Which of the following is NOT a service capacity characteristic?

A)The physical facilities where the service is performed or rendered
B)The skill level of the service personnel who perform or render the service offering
C)The equipment used in producing or rendering the service
D)All of these items are characteristics of service capacity.
E)None of these items are characteristics of service capacity.

Question 35

In an effort to fill capacity and maximize revenue,organizations often create too much demand for their service offerings.

Question 36

Which of the following service characteristics can NOT be adjusted to stretch or shrink production capacity to accommodate the anticipated level of customer patronage?

A)The service facility
B)The service personnel
C)The service equipment
D)None of these characteristics can be used to adjust a service organization's production capacity.
E)All of these characteristics can be used to adjust a service organization's production capacity.

Question 37

Each additional customer served beyond a service organization's _________ capacity ________ the service experience for the customers and the organization.

A)maximum,diminishes
B)maximum,enhances
C)optimum,diminishes
D)optimum,enhances
E)None of these combinations is correct.

Question 38

Which,if any,of the following are NOT approaches for balancing service capacity with customer demand?

A)Smoothing demand
B)Chasing demand
C)Doing nothing
D)All of these can be used to balance service capacity and customer demand.
E)None of these can be used to balance service capacity and customer demand.

Question 39

Each additional customer served beyond an organization's optimum capacity has no effect on the service experience for all customers and the organization's ability to offer excellence.

Question 40

One way in which service organizations may balance service capacity and service demand is to simply do nothing.

Question 41

You recently opened a restaurant,and after a few weeks you noticed that during each day you experience slow times as well as extremely hectic times.Should this pattern of customer demand be of concern to you? Why or why not?

Question 42

Why is demand management a significant problem for services marketing?

Question 43

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
_____________ is the term for the activity of shifting or encouraging patronage to a time when a service's productive capacity is underutilized,and deflecting or discouraging patronage when its capacity is oversubscribed.

Question 44

What issues must be examined to understand the nature of service demand?

Question 45

Should service providers seek to achieve maximum capacity utilization or optimum capacity utilization? Explain your answer.

Question 46

During a recent meeting of top management,the vice president of production asserted that to ensure service excellence,service providers are encouraged to achieve maximum capacity utilization.As vice president of marketing,how would you respond to this statement?

Question 47

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
Establishing a(n)_______________ is one way of controlling demand without increasing capacity or shifting demand.

Question 48

During the past year,your service organization became aware that it is experiencing excess customer demand.As the marketing director for the organization,how would you respond to this condition?

Question 49

What can service organizations do to balance service capacity and demand?

Question 50

Recently a strategic planning meeting was held to determine how to handle over-demand for your firm's service offering.One recommendation that was forwarded was to do nothing.Is this necessarily a wise recommendation to follow? Explain.

Question 51

As chairman of the Marketing Department at a local university,you are faced with overdemand for some marketing courses and underdemand for others.Explain how would you go about balancing the service capacity and customer (student)demand for your courses?

Question 52

What is meant by service capacity,and why is it important for service marketers to understand the nature of service capacity?

Question 53

When planning for the demand of his service offering,Steve was faced with two problems typically experienced by service providers.Describe these two problem areas,and discuss why it is important for services marketers to resolve them.

Question 54

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
_____________ efforts should be used by service marketers to attempt to deflect or shift some customer demand to slower periods.

Question 55

COMPLETION QUESTIONS
Random
Predictive
Service Capacity
Chasing
Maximum
Optimum
Smoothing Demand
Demarketing
Reservation System
Formal Queuing System
Service firms that use a ____________________ ensure that some patrons must wait.