Question 1

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

Accepted Answer

When a firm has excess service capacity, it means it can provide more services than there is demand for. This can result in insufficient demand for their service offering as there are not enough customers to fill the available capacity.

Question 2

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

Accepted Answer

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.

Accepted Answer

Charting the patronage patterns of the segments for the service product allows service organizations to understand the overall demand for the product and adjust their service accordingly.

Question 4

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

Accepted Answer

A service organization can adjust its capacity to match the changing demand in order to ensure that it can meet its customers' needs. This may involve expanding or contracting its workforce, adjusting its hours of operation, or investing in new equipment or technology to increase efficiency. By doing so, the organization can maximize its productivity and minimize its costs, while still providing high-quality service to its customers.

Question 5

Random fluctuation in service demand can be easily managed.

Accepted Answer

Random fluctuation in service demand can be unpredictable and difficult to manage. Businesses may use forecasting techniques and flexible staffing to mitigate the impact but it cannot 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.

Accepted Answer

The answer of Once service demand patterns are discovered;the next...

Question 7

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

Accepted Answer

Demand cycles and perishability are common challenges faced by service organizations. Demand cycles refer to fluctuations in demand due to seasonality, day of the week or time of day whereas perishability refers to the inability to store services for future use.

Question 8

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

Accepted Answer

Service organizations often use various strategies to manage service capacity and demand, including influencing or changing the nature of customer demand. For example, they may offer discounts during off-peak hours to encourage customers to visit during less busy times. They may also promote certain services or products that are less in demand to balance out demand across their offerings.

Question 9

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

Accepted Answer

Stretching capacity means utilizing existing resources to their maximum potential, without adding any new resources. It is a temporary adjustment that helps businesses meet increased demand but 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.

Accepted Answer

Smoothing demand involves managing the timing of patronage to match the productive capacity of a service, so that there is neither excess demand nor underutilized capacity. This can be done through pricing strategies, scheduling, or other methods of incentivizing customers to use a service during off-peak times.

Question 11

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

Accepted Answer

Excess demand occurs when there is more demand for a service than the service provider can supply. This can happen when there is insufficient service capacity available to meet the demand.

Question 12

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

Accepted Answer

The answer of Few service organizations may be characterized as...

Question 13

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

Accepted Answer

Service organizations work with the available capacity they have to meet the demand from customers. They need to try to balance this demand in a way that is efficient and profitable for the organization. It is not as simple as just creating more capacity to meet the demand.

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.

Accepted Answer

Service organizations can use the marketing mix elements such as pricing, promotion, place, and product to influence demand for their services. They can adjust their prices, advertise more, change the location or improve their service quality to attract more customers during slow periods or manage demand during peak periods.

Question 15

Chasing demand by stretching capacity is always a good idea.

Accepted Answer

Stretching capacity without proper planning and analysis can lead to overloading, which can result in poor quality, delayed deliveries, and decreased customer satisfaction. It is important to assess the feasibility and cost-effectiveness of increasing capacity before taking any action.

Question 16

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

Accepted Answer

When demand falls short of capacity, the resources that could have been utilized to meet the demand remain unutilized or wasted.

Question 17

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

Accepted Answer

This is because if the capacity exceeds the demand, the organization would be underutilized and would not be able to generate optimal revenue. On the other hand, if the demand exceeds the capacity, the organization may not be able to meet customer needs, resulting in dissatisfied customers and lost business. Therefore, it is important to find the right 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.

Accepted Answer

Acquiring an accurate understanding of the demand cycle is essential to effectively chase demand and meet customer needs. This allows the organization to plan and allocate resources accordingly and avoid over or under-capacity.

Question 19

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

Accepted Answer

Yes, almost all services have distinct patterns of behavior that can be traced to specific causes. By understanding these patterns, service providers can identify opportunities for improvement and develop effective strategies to meet customer needs.

Question 20

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

Accepted Answer

Service organizations should use strategies to reduce demand, not encourage it, when the firm's capacity is oversubscribed to avoid overloading their resources and decreasing service quality.

Quiz 14: Coping With Fluctuating Demand for Services