Demand and capacity management decisions in services: How they impact on one another
International Journal of Operations & Production Management
ISSN: 0144-3577
Article publication date: 1 May 2002
Abstract
Service managers are continually challenged with balancing customer demand and service capacity. Recent studies have raised awareness of various demand and capacity management practices available to services, but little numerical work has been done to identify how these decisions work together and how they relate to one another. For instance, reducing prices may attract customers during a slow period, but the extent of impact this should have on cross‐training staff is not clear. A simulation based on theoretical and empirical insights explores the impact of various decisions on profitability and operations. The decisions modelled include the impact of: automation, customer participation, cross training employees, informing customers about the operation, and others. It is shown that demand and capacity decisions do indeed impact on each other – sometimes in ways that are not initially obvious. Results provide useful thought‐starters for service managers striving to improve their operations.
Keywords
Citation
Klassen, K.J. and Rohleder, T.R. (2002), "Demand and capacity management decisions in services: How they impact on one another", International Journal of Operations & Production Management, Vol. 22 No. 5, pp. 527-548. https://doi.org/10.1108/01443570210425165
Publisher
:MCB UP Ltd
Copyright © 2002, MCB UP Limited