Balancing Demand and Productive Capacity

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Flashcards for lecture notes on balancing demand and productive capacity for quality service.

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16 Terms

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Demand

The amount of need for a product or service at a given time.

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Capacity

The organization’s ability to deliver services; depends on available inputs like labor, time, space, and other resources.

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Excess Demand

When demand greatly exceeds capacity, leading to services being denied to some customers and missed revenue opportunities.

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Productivity

The efficiency of converting inputs into services.

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Predictable Demand Cycles

Recurring increases and decreases in demand, such as daily, weekly, monthly, or yearly/seasonal cycles.

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Random Demand Fluctuations

Unpredictable variations in demand without clear cycles.

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Demand Patterns by Market Segment

Analyzing customer profiles to identify segment-specific demand patterns and tailor services accordingly.

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Marketing Mix Elements

Tools used to manage customer demand, including price, product, place, and promotion.

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Fixed Capacity

Service capacity that cannot be easily expanded due to limitations like time, labor, equipment, or facilities.

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Optimal Capacity

When resources are fully used without being overstretched, maintaining high service quality.

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Maximum Capacity

When all resources are used to the limit, often resulting in long wait times and customer dissatisfaction.

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Stretching Capacity

Expanding an organization’s ability to meet high demand without making permanent changes.

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Manage Demand Side

Using pricing incentives, reservations, or promotions to control customer flow.

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Manage Supply Side

Increasing resources during peak periods and reducing operations during low demand.

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Productive Capacity

Resources or assets that organizations utilize to manufacture goods and to render services, including Equipment, Facilities, Infrastructure and Labor