FINAL: Supply Chain CH. 12

Assuming the number of arrivals per time period is Poisson distributed with a mean arrival rate of 6 customers per hour, determine the mean interarrival time.

10 minutes

As a manager of a queuing system, what are some important system details you'd like to know about in order to manage the system effectively?

Average arrival rate of customers

As a manager of a queuing system, what are some important system details you'd like to know about in order to manage the system effectively?

Average arrival rate of customers In what order will customers be serviced? Average service rate of service providers/servers How are customer arrivals and service times distributed? System variation? How patient are customers? Will customers leave the line before receiving service? Will customers perceive the service quality is being low due to long waits?

Discuss the important issues involved in managing a global service.

Labor, facilities and infrastructure support Legal and political issues Domestic competitors and the economic climate Identifying global customers

The number of customers per day an organization's service delivery systems are designed to serve within a certain time frame is referred to as: a. Service Capacity b. Capacity Utilization c. Productivity Potential d. Service Throughput

a. Service Capacity

Which of the following would NOT be considered an acceptable option in managing capacity when demand exceeds available service capacity? a. Utilizing fewer facilitating products b. Utilizing technological tools like computers and automated systems c. Cross-training and sharing employees d. Using customers to provide services

a. Utilizing fewer facilitating products

The Wal-Mart effect is best described by which of the following? a. As large retailers locate in communities, the put smaller companies our of business b. Information technologies have allowed large retailers to maintain good productivity growth rates c. Wal-Mart's use of supplier capacity has made it difficult for other companies to find Suppliers d. The growth of large retailers has had a negative impact on the environment

b. Information technologies have allowed large retailers to maintain good productivity growth rates

Which of the following items would be considered a facilitating product? a. The automobiles washed by the car wash b. The suits being cleaned by the dry cleaner c. The tools used to fix your car at an auto shop d. all of these

c. The tools used to fix your car at an auto shop

Which of the following is an example of a person that would be considered to provide a Pure Service? a. photographer b. chef c. musical entertainer d. pharmicist

c. musical entertainer

The three generic competitive strategies are:

cost leadership, differentiation, and focus

Service Response Logistics

the management and coordination of the organization's service activities that occur while the service is being performed. The four primary activities are Service capacity Waiting times Distribution channels Service quality Demand management tactics are important as services cannot be inventoried & customer demand must be met

Location strategy is important in that it can provide barriers to entry, and competitive positioning, as well as generating additional demand.

true

T OR F A service bundle includes the explicit service, the supporting facility, the facilitating goods, as well as the implicit services.

true

T OR F A very popular fast food restaurant is presently staffed with three cash register attendants that are taking orders. Upon entering the restaurant, customers must choose from three separate lines, each of which leads to one of the three registers. Immediately upon placing their order with the register attendant, customers are given their food and drinks by the register attendant. To analyze this situation you would use the queuing model for an infinite source, multiple servers, and multiple channels.

true

T OR F Cross-training workers is a typical capacity management technique for times when demand exceeds capacity.

true

T OR F In order to maximize customer satisfaction/visits, service organizations must be able to identify customer needs, create systems that can quickly satisfy these needs in a cost-effective manner, hire, train, and schedule service representatives effectively, utilize technology effectively, and conveniently locate service facilities.

true

Service Strategy Development

1. Cost Leadership Strategy 2. Differentiation Strategy 3. Focus Strategy

If λ = 6 CUSTOMERS/HOUR and μ = 11 CUSTOMERS/HOUR, in a single server model, find the probability that there will be exactly 1 person in LINE.

0.135

If the average service rate is 15 minutes per customer, and assuming the negative exponential distribution is used to describe the randomness of the service time distribution, then determine the probability that the service time will be less than or equal to 10 minutes.

0.49

The average transaction at a single channel, single phase automatic teller can be completed in 7.5 minutes and customers arrive at the average rate of one every ten minutes. On average, what is the server utilization? (Choose the closest answer.)

0.75

Different Demand Strategies

1. Level Demand Strategy: capacity remains constant regardless of demand 2. Chase Demand Strategy: capacity varies with demand 3.

Service Response Logistics

1. Managing Service Capacity (Service capacity is the # of customers per period the firm's service system is designed to serve) 2. Managing Queue Times: Consists of the management of actual waiting time & perceived waiting time 3. Managing Distribution Channels: Multiple methods to deliver service-Self Service, Internet, Franchising, Partnership 4. Managing Service Quality: Service quality depends on the firm's employees to satisfy customers varying expectations

The Five Dimensions of Service Quality

1. Reliability 2. Responsiveness 3. Assurance 4. Empathy 5. Tangibles

What are three key differences between goods and services industries/organizations?

1. services cannot be inventoried 2. services have high customer interaction 3. Services are decentralized − In other words, location is important.

T OR F A service bundle describes the explicit service purchased.

false

The average transaction at an automatic teller can be completed in 7.5 minutes and customers arrive at the average rate of one every ten minutes. On average, how many customers are there in line? (Choose the closest answer.)

3.000 customers

Countries that shift from a manufacturing-oriented economy to a service-oriented economy sometimes see their productivity growth decline over time. This phenomenon is called:

Baumol's Disease

Capacity Utilization Formula

Capacity Utilization = (actual customers served by period) / (capacity)

Which of the following strategies is being followed by a company that is based on creating a service that is considered to offer unique service elements for which customers may consider paying higher prices?

Differentiation Strategy

Customers purchase a Bundle of attributes combination of:

Explicit services - storage & use of your money Supporting facility - bank w/drive-up tellers Facilitating goods - deposit forms, monthly statements Implicit services - security provided, privacy, & convenience

Describe the key considerations of service managers which can help in providing a better service experience?

Layout of service areas Average arrival rate of customers In what order will customers be serviced? Average service rate of service providers/servers How are customer arrivals and service times distributed? System variation?

Productivity Formula

Productivity = outputs produced / inputs used Outputs produced (ex. sales amount) Single factor productivity (ex. labor hours) Multiple-factor productivity) (ex. labor, material, energy, & capital).

When studying queuing models, a customer who enters the waiting line but leaves the system prior to receiving service is said to have:

Reneged

David Maister's First Rule of Service is:

Satisfaction = perception − expectation

What is the difference between a level demand strategy and a chase demand strategy?

The key difference between the two strategies is how the firm manages its own capacity to meet demand. In a level demand strategy a firm utilizes a constant amount of capacity regardless of demand variations. In a chase demand strategy a firm varies capacity according to variations in demand.

Which of the following would result in an INCREASE in productivity?

The value/amount of the inputs used stays the same and the value/amount of outputs increases

T OR F A retailer with two checkout stands is an example of a single-channel, multiple-phase queuing system.

false

T OR F Balking occurs when customers decide to leave the queue after some length of waiting time in the queue.

false

T OR F Baumol's disease refers to the fact that multiple factor productivity measures tend to be bad, because firms often concentrate on improving one, while neglecting others.

false

T OR F One problem with services is that they cannot expand globally.

false

T OR F Service organizations need to consider the fact that the services they provide are not consumed by the immediate customer, rather, services are typically passed on to customers farther down a distribution channel.

false

T OR F The optimal capacity utilization for an organization would be 100%.

false

T OR F Themed restaurants such as the ESPN zone (sports theme), Rainforest Cafe (jungle theme), and Chuck E. Cheese (kids theme) are all examples of Entertailment facilities.

false

T OR F While most economies have grown through the growth of manufacturing industries, India has experienced an increase in the standard of living because of rapid growth of agricultural industries and a drop in the services related industries.

false

Baumol's disease

productivity growth tends to be low in service economies

First-come-first-served is an example of a(n):

queue discipline

Differences between services and goods

services cannot be inventoried, services are unique, high customer service interaction, services are decentralized due to inability to inventory & transport service products

T OR F Long-term customer satisfaction, especially in the face of service failures, requires organizations to empower front-line service personnel to identify problems and then provide solutions quickly and an empathetic way.

true

T OR F Service facilities are normally decentralized.

true

T OR F Since the 1950s, the percentage of service related jobs has increased much more rapidly than the percentage of manufacturing and agriculture related jobs in United States due to the use of technology and mass production techniques developed during that time.

true

T OR F When a customer takes their automobile to a carwash, the carwash provides state utility to the vehicle.

true