Services Marketing Concepts

Strategies and Cases 5th

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CHAPTER 5 THE SERVICE DELIVERY PROCESS

MULTICHOICE

1. The manner in which "operational competitiveness" is embraced by various service firms can be
described by all the following stages except:

(A) available for service.

(B) marketing and operations.

(C) journeyman.

(D) distinctive competencies achieved.

(E) world-class service delivery.

Answer : (B)

2. Customers ultimately determine:

(A) the type of demand.

(B) the levels of marketing effectiveness and operational efficiency.

(C) the cycle of demand.

(D) the length of the service experience.

(E) all of the these.

Answer : (E)
3. The place within an organization where its primary operations are conducted is called the:

(A) the technical core.

(B) the organizational point.

(C) the factory.

(D) the main system.

(E) main terminal.

Answer : (A)

4. The strategy of breaking up large, unfocused plants into smaller units buffered from one another
so that each can be focused separately is referred to as:
(A) the perfect-world model.

(B) operations segmentation.

(C) the plant-within-a-plant concept.

(D) operations segregation.

(E) management by focus.

Answer : (C)

5. All of the following are examples of the technical core within an organization except the:

(A) kitchen in restaurant.

(B) surgical room in a hospital.

(C) service bay at an auto repair facility.

(D) waiting area at a dentist's office.

(E) projection booth in a movie theater.

Answer : (D)

6. According to Thompson's perfect-world model, perfect efficiency occurs when:

(A) employees understand their jobs.

(B) role congruence occurs between customers and employees.

(C) inputs, outputs, and quality happen at a constant rate and remain known and certain.

(D) customer needs are being met.

(E) when the operation concentrates on performing one particular task in one particular part of the
plant.

Answer : (C)

7. Strategies to increase the efficiency of service operations include all of the following except:

(A) buffering.

(B) smoothing.

(C) anticipating.

(D) rationing.

(E) allocating.
Answer : (E)

8. The strategy that resorts to triage when the demands placed on the system by the environment
exceed its ability to handle them is referred to as:

(A) buffering.

(B) smoothing.

(C) anticipating.

(D) rationing.

(E) allocating.

Answer : (D)

9. The strategy that surrounds the technical core of the operation with input and output components
is called:

(A) buffering.

(B) smoothing.

(C) anticipating.

(D) rationing.

(E) allocating.

Answer : (A)

10. Which of the following is NOT one of the broad categories of strategies used to overcome the
problems of service operations?

(A) isolating the technical core

(B) production-lining the whole system

(C) creating flexible capacity

(D) increasing customer participation

(E) maximizing the servuction system

Answer : (E)

11. The objective of decoupling is:

(A) separating consumption in time and space.

(B) unbundling services so that they may be purchased separately.

(C) separating the technical core of the operation from the high customer contact areas of the firm
so that efficiencies may be achieved.

(D) managing consumers so that they do not negatively influence one another's service experience.

(E) separating co-workers who, due to their differences, decrease the operational efficiency of the
system.

Answer : (C)

12. Production-lining a service operation can be achieved through:

(A) utilizing hard technologies.

(B) customizing services.

(C) utilizing soft technologies.

(D) meeting individual customer needs.

(E) utilizing hard and soft technologies.

Answer : (E)

13. Which of the following is an example of decoupling?

(A) using part-time employees

(B) sharing capacity with another firm

(C) handling routine transactions by mail or email

(D) cross-training employees

(E) offering discounts during non-peak times

Answer : (C)

14. Soft technologies refer to the:

(A) personal touches that ultimately lead to customer satisfaction.

(B) flexible rules that can be bent to meet customer needs.

(C) guidelines that permit employee empowerment.

(D) hardware that facilitates the production of a standardized product.

(E) rules, regulations, and procedures that facilitate the production of a standardized product.
Answer : (E)

15. An automatic teller machine (ATM) is an example of:

(A) production-lining.

(B) isolating the technical core.

(C) decoupling.

(D) creating flexible capacity.

(E) moving the time of demand.

Answer : (A)

16. All of the following are examples of creating flexible capacity except:

(A) using part-time employees.

(B) sharing capacity with another firm.

(C) handling routine transactions by mail or email.

(D) cross-training employees.

(E) none of these are exceptions.

Answer : (C)

17. Blueprints identify all of the following process steps except:

(A) the direction in which processes flow.

(B) the time it takes to move from one process to the next.

(C) the costs involved with each process step.

(D) the amount of inventory build-up at each step.

(E) none of these are exceptions.

Answer : (E)

18. With regards to constructing a service blueprint, the time required to perform one activity at
one station is called:

(A) process time.

(B) activity time.

(C) maximum output per hour.

(D) operation time.

(E) bottleneck time.

Answer : (B)

19. Exhibit 5-1

The following questions are based on the below cafeteria flowchart and the information provided in
the table. Customers start at counter A and move to Counter B. Customers then choose one of two
counter Cs and then move on toward Counter D. Customers then choose one of two counter Es and
then move on toward Counter E.

INFORMATION TABLE

Wage per Person per

Counter(s) Activity Time
Hour

A 10 secs. $6
B 30 secs. 7
C 60 secs. 7
D 40 secs. 7
E 30 secs. 7
F 20 secs. 8

Refer to Exhibit 5-1. What is the activity time for Counter C?

(A) 10 seconds

(B) 20 seconds

(C) 30 seconds

(D) 45 seconds

(E) 60 seconds

Answer : (E)

20. Exhibit 5-1

The following questions are based on the below cafeteria flowchart and the information provided in
the table. Customers start at counter A and move to Counter B. Customers then choose one of two
counter Cs and then move on toward Counter D. Customers then choose one of two counter Es and
then move on toward Counter E.
INFORMATION TABLE

Wage per Person per

Counter(s) Activity Time
Hour

A 10 secs. $6
B 30 secs. 7
C 60 secs. 7
D 40 secs. 7
E 30 secs. 7
F 20 secs. 8

Refer to Exhibit 5-1. What is the process time for Counter E?

(A) 10 seconds

(B) 15 seconds

(C) 20 seconds

(D) 30 seconds

(E) 60 seconds

Answer : (B)

21. Exhibit 5-1

The following questions are based on the below cafeteria flowchart and the information provided in
the table. Customers start at counter A and move to Counter B. Customers then choose one of two
counter Cs and then move on toward Counter D. Customers then choose one of two counter Es and
then move on toward Counter E.

INFORMATION TABLE

Wage per Person per

Counter(s) Activity Time
Hour

A 10 secs. $6
B 30 secs. 7
C 60 secs. 7
D 40 secs. 7
E 30 secs. 7
F 20 secs. 8

Refer to Exhibit 5-1. Which of the following counters produces a maximum output per hour of 240
customers?

(A) Counter A

(B) Counter B

(C) Counter C

(D) Counter D

(E) Counter E

Answer : (E)

22. Exhibit 5-1

The following questions are based on the below cafeteria flowchart and the information provided in
the table. Customers start at counter A and move to Counter B. Customers then choose one of two
counter Cs and then move on toward Counter D. Customers then choose one of two counter Es and
then move on toward Counter E.

INFORMATION TABLE

Wage per Person per

Counter(s) Activity Time
Hour

A 10 secs. $6
B 30 secs. 7
C 60 secs. 7
D 40 secs. 7
E 30 secs. 7
F 20 secs. 8

Refer to Exhibit 5-1. How many customers can this cafeteria process in an hour?

(A) 360

(B) 120

(C) 90

(D) 240
(E) 180

Answer : (C)

23. Exhibit 5-1

The following questions are based on the below cafeteria flowchart and the information provided in
the table. Customers start at counter A and move to Counter B. Customers then choose one of two
counter Cs and then move on toward Counter D. Customers then choose one of two counter Es and
then move on toward Counter E.

INFORMATION TABLE

Wage per Person per

Counter(s) Activity Time
Hour

A 10 secs. $6
B 30 secs. 7
C 60 secs. 7
D 40 secs. 7
E 30 secs. 7
F 20 secs. 8

Refer to Exhibit 5-1. Assuming one service provider per counter and based on its current
configuration, the cafeteria's service cost per meal is:

(A) $42.00

(B) $0.11

(C) $0.46

(D) $2.14

(E) $0.62

Answer : (E)

24. Exhibit 5-1

The following questions are based on the below cafeteria flowchart and the information provided in
the table. Customers start at counter A and move to Counter B. Customers then choose one of two
counter Cs and then move on toward Counter D. Customers then choose one of two counter Es and
then move on toward Counter E.
INFORMATION TABLE

Wage per Person per

Counter(s) Activity Time
Hour

A 10 secs. $6
B 30 secs. 7
C 60 secs. 7
D 40 secs. 7
E 30 secs. 7
F 20 secs. 8

Refer to Exhibit 5-1. Where is the bottleneck located in this example?

(A) Counter A

(B) Counter B

(C) Counter C

(D) Counter D

(E) Counter E

Answer : (D)

25. Exhibit 5-1

The following questions are based on the below cafeteria flowchart and the information provided in
the table. Customers start at counter A and move to Counter B. Customers then choose one of two
counter Cs and then move on toward Counter D. Customers then choose one of two counter Es and
then move on toward Counter E.

INFORMATION TABLE

Wage per Person per

Counter(s) Activity Time
Hour

A 10 secs. $6
B 30 secs. 7
C 60 secs. 7
D 40 secs. 7
E 30 secs. 7
F 20 secs. 8

Refer to Exhibit 5-1. If an extra counter is added at the bottleneck location, how many customers can
the cafeteria process in an hour?

(A) 360

(B) 120

(C) 90

(D) 240

(E) 180

Answer : (B)

26. Exhibit 5-1

The following questions are based on the below cafeteria flowchart and the information provided in
the table. Customers start at counter A and move to Counter B. Customers then choose one of two
counter Cs and then move on toward Counter D. Customers then choose one of two counter Es and
then move on toward Counter E.

INFORMATION TABLE

Wage per Person per

Counter(s) Activity Time
Hour

A 10 secs. $6
B 30 secs. 7
C 60 secs. 7
D 40 secs. 7
E 30 secs. 7
F 20 secs. 8

Refer to Exhibit 5-1. If an extra counter is located at the bottleneck location, what is the new service
cost per meal?

(A) $49.00

(B) $0.53

(C) $0.46

(D) $2.14
(E) $1.90

Answer : (B)

27. A service operation consists of four stations. Station 1 can process 150 customers per hour.
Station 2 can process 300 customers per hour. Stations 3 can process 100 customers per hour, and
Station 4 can process 150 customers per hour. What is the maximum number of customers the
entire operation can process in an hour?

(A) 700

(B) 300

(C) 175

(D) 150

(E) 100

Answer : (E)

28. The is calculated by dividing the activity time by the number of locations at which the
activity is performed.

(A) service cost per meal

(B) maximum output per hour

(C) process time

(D) activity time

(E) bottleneck time

Answer : (C)

29. The most common mistake made when constructing a service blueprint is:

(A) bottlenecks are not identified correctly.

(B) failure points are not identified correctly.

(C) the blueprint is one-sided − representing only the firm's perception of the process.

(D) script norms are misunderstood.

(E) the time frame for service execution is miscalculated.

Answer : (C)
30. Which of the following is NOT a step in the construction process of a service blueprint?

(A) obtaining scripts from both customers and employees

(B) segmenting customers based on the content of the script

(C) identify steps in the process where the system can go awry

(D) calculating the time frame for service execution

(E) analyzing the profitability of the system

Answer : (B)

31. A volume-oriented positioning strategy is achieved by:

(A) increasing divergence.

(B) reducing divergence.

(C) increasing complexity.

(D) reducing complexity.

(E) unbundling the service.

Answer : (B)

32. The positioning strategy that increases divergence so that the operation can tailor the service
experience to each customer is referred to as a:

(A) niche positioning strategy.

(B) volume-oriented positioning strategy.

(C) specialization positioning strategy.

(D) penetration strategy.

(E) market diversification strategy.

Answer : (A)

33. A specialization positioning strategy is accomplished by:

(A) increasing divergence.

(B) reducing divergence.

(C) increasing complexity.

(D) reducing complexity.

(E) bundling the service.

Answer : (D)

34. The positioning strategy that increases complexity by adding more services and/or enhancing
current services to capture more of the market is referred to as:

(A) niche positioning strategy.

(B) volume-oriented positioning strategy.

(C) specialization positioning strategy.

(D) penetration strategy.

(E) market diversification strategy.

Answer : (D)

35. Divesting an operation of different services and concentrating on providing only one or a few
services in order to pursue a specialization position strategy is called:

(A) increasing divergence.

(B) reducing divergence.

(C) increasing complexity.

(D) unbundling the service.

(E) divesting concentration.

Answer : (D)

ESSAY

36. Based on the following cafeteria flowchart and the information provided in the table: a. What is
the service cost per meal?
b. If you were to add another station to fix the current bottleneck, where would you add it?
c. How does this affect the service cost per meal?

INFORMATION TABLE
Wage per Person per
Counter(s) Activity Time
Hour
A 20 secs. $6
B 60 secs. 7
C 120 secs. 7
D 80 secs. 7
E 60 secs. 7
F 40 secs. 8

Graders Info :

The service cost per meal is calculated by dividing the cost of personnel per
a. hour ($56.00) by the maximum number of people that can be served in an hour
(45). $56/45 = $1.24
b. The bottleneck occurs at station D.
By adding another station, labor costs would increase to $63.00, and the
c. maximum number of people served in an hour would increase to 60. The new
service cost per meal would be $1.05 − a decrease of 19 cents.

37. Discuss the relationship between operations and marketing as it pertains to developing service
delivery systems.

Graders Info :

In a very broad sense, one way of viewing the task of marketing and operations is to think of it as the
marrying of consumers' needs with the technology and manufacturing capabilities of the firm. Such
a marriage will obviously involve compromises since the consumers' needs can seldom be met
completely and economically. Similarly, operational efficiency has to be balanced against the
effectiveness of the system from the consumer's point of view. In sum, operations personnel must
recognize the importance of their marketing counterparts and vice versa.

38. Discuss the type of operation that would typify peak efficiency.

Graders Info :

J. D. Thompson has proposed that to operate efficiently, the firm must be able to operate "as if the
market will absorb the single kind of product at a continuous rate and as if the inputs flowed
continuously at a steady rate and with specified quality." At the center of his argument was the idea
that uncertainty creates inefficiency. In the ideal situation, the technical core is able to operate
without uncertainty on both the input and output side.

39. Describe the difficulties associated with applying efficiency models to service organizations.

Graders Info :

The servuction system itself is an operations nightmare, since it is impossible to use inventories and
impossible to decouple production from the customer. Instead of receiving demand at a constant
rate, the system is linked directly to a market that frequently varies from day to day, hour to hour,
and even minute to minute. This creates massive problems in capacity planning and utilization.

40. Define the fundamental components of a service blueprint.

Graders Info :

Service blueprints identify the directions in which processes flow, the time it takes to move from one
process to the next, the costs involved with each process step, the amount of inventory build-up at
each step, and the bottlenecks in the system.

41. Discuss the strategies available for new service development.

Graders Info :

New-service development within service firms can be implemented through the introduction of
complexity and divergence. Complexity is a measure of the number and intricacy of the steps and
sequences that constitute the process − the more steps, the more complex the process. Divergence
is defined as the degrees of freedom service personnel are allowed when providing the service. New
service formats can be developed by increasing or decreasing the firm's levels of divergence and/or
complexity. Companies that wish to pursue a volume-oriented positioning strategy often do so by
reducing divergence to create product uniformity and reduce costs. A niche positioning strategy
increases divergence in an operation to tailor the service experience to each customer. The
specialization positioning strategy reduces complexity by unbundling the different services offered.
A penetration strategy increases complexity by adding more services and/or enhancing current
services to capture more of a market.