Demand & Supply

Challenge exists because of inseparability & Perishability

Capacity can take several forms- Time( Shows), Space & People or
combination of all.
Service providers always look for Optimality & efficiency .
Its necessary to reduce to the gap between Maximum capacity and
optimal capacity.
Basic approaches
Adjust demand to capacity
Manage the level of demand
Source- Challenges in Service Prof. Jayanthu Chatterjee, IIT Kanpur

Managing Capacity
Stretch & Shrink Capacity
Offer Inferior or extra capacity at peaks
Use facilities for longer/shorter periods
Reduce amount of time spent in process by minimizing slack
Adjust Capacity to match Demand
Cross Train employees
Use part time employees
Create flexible capacity
Rent/Share facilities & Equipment's

Managing Demand
Take no action
Interventionist Approach
Inventorying Demand until capacity becomes available
Manage demand with the process
Changing service element

Source- Challenges in Service Prof. Jayanthu Chatterjee, IIT Kanpur