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Questions and Answers
What are the two main factors that need to be considered when managing demand in the service industry?
What are the two main factors that need to be considered when managing demand in the service industry?
A service organization has reached optimal capacity when all the employees are stretched to their maximum and cannot handle any additional customers.
A service organization has reached optimal capacity when all the employees are stretched to their maximum and cannot handle any additional customers.
False
Which of the following is NOT a strategy to reduce excess demand during peak times?
Which of the following is NOT a strategy to reduce excess demand during peak times?
What are the two main types of demand patterns that can be observed in service industries?
What are the two main types of demand patterns that can be observed in service industries?
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What is the primary aim of demand management in service organizations?
What is the primary aim of demand management in service organizations?
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What strategy involves adjusting the organization's resources to match fluctuations in demand?
What strategy involves adjusting the organization's resources to match fluctuations in demand?
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Full charge pricing during peak periods is a strategy to increase demand.
Full charge pricing during peak periods is a strategy to increase demand.
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What is the main reason why queues form in service organizations?
What is the main reason why queues form in service organizations?
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Which type of queue system involves customers forming a single line and being served by the first available server?
Which type of queue system involves customers forming a single line and being served by the first available server?
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A reservation system is primarily useful for handling peak periods and reducing the need for customers to wait in long lines.
A reservation system is primarily useful for handling peak periods and reducing the need for customers to wait in long lines.
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What is the most important factor to consider when differentiating waiting customers in a service organization?
What is the most important factor to consider when differentiating waiting customers in a service organization?
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Long waiting times can lead to customer dissatisfaction and a negative perception of a service organization's quality.
Long waiting times can lead to customer dissatisfaction and a negative perception of a service organization's quality.
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Study Notes
Demand and Capacity in Tourism
- Demand is the volume of goods and services customers need. Capacity is the organization's ability to provide these
- Supply is the amount of goods or products available.
Managing Demand
- Excess demand: Demand exceeds available capacity, resulting in lost sales opportunities.
- Demand exceeding optimal capacity: Demand is met, but quality of service deteriorates due to overcrowding.
- Balanced demand and supply: Ideal situation where demand matches capacity, resulting in good service and no delays.
Demand Patterns
- Predictable cycles: Demand rises and falls at consistent intervals (hourly, daily, weekly, monthly, seasonally). Organizations can predict and prepare for these fluctuations.
- Random fluctuations: Demand changes unexpectedly due to weather, health crises, natural disasters, or acts of war/terrorism.
Managing Capacity
- Time constraints: Efficient use of employee time is crucial for profitability.
- Labor: Labor costs can be high during peak seasons.
- Equipment: Capacity may be limited by available equipment.
- Facilities: Capacity is limited by physical spaces and facilities.
Strategies for Adjusting Capacity
- Temporary capacity increases: Hiring part-time staff, extending hours, or renting additional facilities.
- Shifting capacity: Adjusting capacity according to fluctuating demand patterns
- Chase Demand: Adjusting resources to match demand fluctuations for profitable operation
- Increasing demand: Encouraging more business/customers during off-peak seasons
Waiting Lines and Queues
- Queue systems: Important to manage customer flow and reduce waiting times.
- Types of queues: Single sequential, parallel, single-line-to-multiple-servers, designated lines, numbering system, waiting lists
- Strategies for dealing with queues: Operational process audits, queue configuration, reservation systems
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Description
This quiz explores the concepts of demand and capacity within the tourism industry. It covers how organizations manage excess demand, balance supply and demand, and prepare for predictable and random demand patterns. Test your understanding of effective strategies for managing capacity in tourism.
