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Demand and Supply Management In Services Characteristics of services Volatile and unpredictable markets Once a plane has left, the chance to earn has gone
Causes Of Volatile And Unpredictable Of Demand In Services Causes of seasonality Climate Festive Behavioural Political financial Social
Demand Management Strategy Level capacity plan strategy - constant supply regardless of demand size Chase demand strategy- matching supply with demand as demand varies
Demand Management Strategy Service pricing Customer behaviour Understanding the market- what customers prefer and what time Hiring of staff- part-time, overtime, bank staffing; agency, etc Capacity sharing arrangement- hotels refers each other Customer participation Waiting time management –queuing strategy
Demand Management Strategy Renting/leasing equipment Cross- training employees Facility planning Technology – reservation systems; SST Peak and off peak outsourcing elements of the production process
Demand forecasting Intentions and expectations surveys Market share Market forecast Sales force opinion Expert opinion Past sales analysis
Task 1 Assume you manage a winter ski resort in Switzerland Explain the underlying pattern of demand fluctuation likely to occur and the challenges it would present to you as a manager. Is the pattern of demand predictable or random? Explain and give examples of how you might use different strategies to smooth the peaks and valleys of demand during peak and slow periods.
Task 2 Assume that you are a manager of an airline The graph below shows your monthly demand levels. Explain the underlying pattern of demand fluctuation and the challenges it would present to you as a manager. Is the pattern of demand predictable or random? Explain and give examples of how you might use different strategies to smooth the peaks and valleys of demand during peak and slow periods.