Service Management Final Exam Study

Which of the following occurrences would be considered a "moment of truth" in a restaurant setting?

A receptionist assigning a table to a customer.

Which of the following is a poka-yoke method?

Adopting a checklist to help an employee avoid making a mistake.

All but one of the following are quality tools for analysis and problem solving.

Bar chart.

________ is not an example of unethical customer-contact behavior.

Creating a need for service

Which one of the following is not a principle of Deming's philosophy?

Employee loyalty.

In analytical queuing models, the calling population mainly determines whether the queue will be finite or infinite

False

In the M/M/1 model the calling population is finite.

False

Internet banking is a service that would appeal to the economizing customer, the personalizing customer, and the convenience customer.

False

Level demand and chase capacity are the two generic strategies for capacity management.

False

Obsolescence is part of shortage costs.

False

Overbooking is a strategy that can be used to smooth demand.

False

Which one of the following is an example of a process layout?

Hospital.

Which of the following queue configurations permits opportunities for division of labor and service differentiation?

Multiple queue.

Facility layout is discussed with attention to traffic flow, space planning, and which one of the following?

Need to avoid unnecessary travel

Identify the bottleneck operation in the following exclusive hairdressing salon. Activity Average time, min. a. Pre-counseling 15 b. Shampoo 10 c. Haircut 30 d. Manicure 20

Option C

The average time a customer should expect to wait can be calculated using just the mean arrival rate and the mean service rate.

True

The critical fractile is a cumulative probability of demand.

True

In regression models, the variable of interest (being forecast) is called ________.

a dependent variable

In the annual cost curve for the EOQ model, the ordering cost ________ with the order quantity.

decreases negative exponentially

Healthcare is an example of a service that exhibits high scalability.

false

SWOT analysis is objective with easily agreed upon results.

false

Service industries have low entry barriers because economy-of-scale opportunities are limited.

false

An inventory model with quantity discounts has all of the following features, except ________

increased ordering costs

The purpose of differential pricing is to ________.

make off-peak usage attractive

The optimization criteria governing the location of a service facility is determined mainly by the ________.

ownership of the service, i.e., public or private

The major input into a large public hospital from a service point of view would be ________.

patients

There are five dimensions that customers use to judge service quality. The willingness to help customers and to provide prompt service is ________.

responsiveness

In the design of an inventory system all of the following is considered except ________.

safety stocks

The Delphi method is best used when forecasting ________.

technological change

The accuracy of a time-series model is dependent upon ________.

the assumption that the future is a projection of the past

Service capacity decisions have all of the following strategic characteristics, except ________

the decision to invest in capacity will attract competitors

In general, for infinite queues, the expected number of people in the system is equal to ________

the expected number in the queue plus the expected number in service

When the number of arrivals per unit time follows a Poisson distribution, the most important implication is that ________.

the time between arrivals is exponentially distributed

Subjective forecasting models are best characterized by ________.

the use of opinion as a basis for a forecast

Information is a substitute for inventory.

true

If you are going to open four facilities and have identified six candidate locations, how many different combinations of site selections are there?

15

Which of the following is not an increase in service complexity?

A supper club opens for Sunday brunch.

Place the McDonald's fast food chain within the following matrix

A. Little and Low

In which of the following cases does the use of information raise ethical issues?

All of the answers. Yield management. Micromarketing. Selling information

Which one the following is not a guiding principle of lean philosophy?

Be flexible in response to customer demands.

Which of the following concepts is not associated with the 'news vendor problem'?

Breakeven analysis.

A customer who is interested in the self-service option would find which of the following dimensions of service most important?

Customer's control of the situation.

Which of the following is not a strategy for managing capacity?

Developing complementary services.

Which of the following techniques does not lessen the boredom of waiting customers?

Displaying time with a large analog clock.

Which one of the following is not an example of a high customer contact service?

Dry cleaning.

When a quantity discount is offered, the first step should be to compute ________.

EOQ for the lowest price per unit

Which of the following is not an element of a Quality Improvement Program?

Emphasizing subjective data over difficult-to-analyze objective data

Which of the following is not a principle on which service experience design is based?

Encourage customer feedback

Which of the following is not a reason that a service guarantee works?

Encourages individual employees to set their own standards.

Which of the following is not an advantage of a multiple queue configuration?

FCFS rule is guaranteed.

A factor that simplifies the design of service systems is the presence of the customer in the process.

False

A major incentive for innovation in services is the ability to patent an idea.

False

Because of the nontangible nature of service, forecasting does not play as important role in service operations as in manufacturing operations.

False

Both measures of forecast accuracy, MAD and MSE, give equal weight to all forecasting errors.

False

The objective of Six Sigma is to eliminate variation in process performance.

False

Which of the following is not part of a good service guarantee?

It is difficult for the customer to invoke.

Which one of the following is not a key characteristic that leads to a difficult competitive environment for service industries?

Lack of government regulation and oversight.

Of the nine dimensions of service competition, three are regarded as most likely to become service losers. Which of the following is not one of those three vulnerable dimensions?

Price

Which of the following dimensions of service quality is most important to customers?

Reliability.

________ is the time it takes to complete a process from time of arrival to time of departure.

Throughput time

Exponential smoothing prevents overreaction to extremes in the actual observed values.

True

Self-service has evolved from machine-assisted to Internet-facilitated.

True

When customer expectations are confirmed by perceptions, service quality is considered satisfactory.

True

Which of the following retail servicescapes would support an upscale store image best?

Well-spaced, lightly stocked shelving.

Which one of the following is most affected by the bullwhip effect?

Wholesaler

A batch type of service process has the characteristic of ________.

a group of customers treated simultaneously

The FCFS rule is most often used because ________.

analytical models depend upon its use

The A/B/C notation classifies queuing systems on the basis of ________.

arrival rates, service rates, and number of servers

A good overbooking strategy should ________.

balance the expected opportunity cost of idle service capacity and expected cost of turning away customers who have reservations

A single-server food cart competes with several nearby food carts and experiences arrival of customers during an 8-hour period as shown below: Customers would probably exhibit a high incidence of ________ during the 11 a.m.-1 p.m. and 4 p.m.-5 p.m. periods; to avoid this opportunity cost, the cart owner should ________.

balking; add another server during peak periods

The concept of focus in location decisions considers all but one of the following issues: ________

competitive changes

The calling population is termed finite when _______

only a limited number of people may use the facility in any given period

Service winners are the competitive dimensions used by customers to decide among qualified service providers.

true

The competitive dimension of dependability is a likely candidate for becoming a service loser.

true

The consumer participates in the service process, which is not the case in manufacturing.

true

The central idea in the retail discounting model is that ________.

turnover of stock generates money for future investment

In using the critical fractile criterion P(d < x) = C u/(C u + C o) for overbooking, the 'd' refers to the ________.

umber of no-shows based on past experience

Faced with variable demand and a perishable capacity, a service manager can smooth demand by ________.

using reservations and appointments

A cruise line has the option of locating its dock in Miami or Pensacola because both cities have adequate port facilities. Which of the following considerations would seem to be the most germane?

City served by major airport.

The service package consists of five features. Which one of the features listed below is not included in the package?

Cost of service.

Concealment of the waiting line or at least part of it is a very effective deterrent against reneging.

False

Continuous improvement is a valuable concept, but it lacks measurement techniques.

False

Cross-median is an approach to the location of a single facility using the metropolitan metric to maximize the total distance traveled.

False

Customer and server interact face-to-face in technology-mediated service encounters.

False

For a system to reach steady state, the arrival rate must always be greater than the service rate, i.e., the traffic intensity ρ must always be greater than unity.

False

In the Delphi method, the opinions of experts are collected, then the analyst resolves differences of opinion to arrive at a consensus.

False

Pareto chart is an arrangement of data where the causes of a problem are arranged in ascending frequency of occurrence in order to highlight the most likely cause.

False

Reducing the variability either in service time or arrival time can reduce most of the waiting involved for the consumers.

False

Reduction of the role played by the consumer is an effective way of improving productivity and decreasing the cost of the service.

False

Saturation clustering occurs when service firms locate their business near their competitors because they expect a high level of customer traffic.

False

Service encounter, quality, information, and capacity planning are all managerial elements of a strategic service concept.

False

The absence of quantifiable criteria considerably diminishes the importance of facility location methods in the public sector.

False

The corporate culture of a firm does not significantly influence the quality of the service it provides because the culture is internal and, therefore, not perceived by the customer.

False

The fall in employment in the agricultural sector is the primary reason for the increase in service sector employment.

False

The greedy algorithm is a solution procedure that is used for measuring the attraction of a customer to a facility.

False

The main advantage of analytical models is that they can be used almost anywhere regardless of the underlying assumptions. They still will provide good results.

False

The objective of lean service is a purposeful flow of satisfied customers.

False

Waiting is often seen as psychological punishment because the consumer is aware of the opportunity cost of waiting time and the resulting loss of earnings.

False

Which of the following is not a characteristic of a production-line approach to provide a service?

High employee autonomy in task execution.

The presence of a friendly desk clerk in a budget hotel is an example of which of the four features of a service package?

Implicit services.

Which of the following is a strategy for closing the gap between customer expectations and management perceptions of customer's expectations (GAP 1)?

Improved market research.

A service blueprint can be used for all but one of the following.

Maintain the level of service complexity and divergence.

Which of the following is not considered a criterion for evaluating the triple bottom line?

Market share

In the design of a fitness center, where would be the most advantageous location of a juice bar? Consider such factors as traffic flow, impulse buying, and orientation/visibility.

Near the entrance/exit of the gym.

A cruise ship has available a certain number of rooms in each of 10 categories of appointments ranging from a two-bunk inside cabin to a suite with an outside patio and indoor sitting area. If a passenger requests a sailing date in which the desired cabin is sold out, which of the following actions would be considered the least viable alternative for the cruise line?

Overbook the cabin.

Which one of the following is the most important for a continuous review system?

POS scanning.

Which of the following is not an effective way to manage the psychology of waiting?

Prominently display time with a large analog clock.

The service process matrix classification consists of four categories of services. Which one of the four features listed below is not included in this classification?

Public service

________ is not a strategy for accommodating of customer-induced variability.

Reward increased effort

Which one of the following is not an example of detection costs?

Rework

Supermarkets can be described by which of the following facility arrangement?

Self-serve followed by service in parallel.

Which one of the following is not a major factor that could influence facility design?

Site location.

Which interviewing technique would be appropriate to determine how a potential employee would react in a service encounter?

Situational vignette.

Which of the following forecasting models is required for the forecast of the demand for hotel services?

Time series and causal.

A self-service gasoline station that is equipped with a credit card reader is an example of a customer-dominated service encounter.

True

A well-conceived servicescape can communicate desired customer behavior.

True

ABC analysis is an application of the 80-20 rule.

True

An important variable in the design process is the amount of customer participation in the delivery of the service.

True

At a roadside snake farm, both customer and employee perform within the servicescape.

True

Benchmarking measures a firm's quality performance by comparing it to the performance of other companies that are known for being "best in class."

True

Both manufacturing and services can suffer from technological obsolescence

True

Capacity planning decisions deal implicitly with decisions on the cost of making consumers wait and the extent to which these costs can be borne.

True

Costs for preparing time series forecasts generally are lower than for other models.

True

Cross-training employees as a strategy to increase flexibility is feasible only when there exist tasks, the demands for which peak at different times

True

Demand smoothing is accomplished by the differential pricing policy of telephone companies.

True

Efficiency vs satisfaction is the possible source of conflict in the relationship between the customer and the service organization.

True

Fast-food restaurants have adopted the production-line approach to service design.

True

Fixing service-process problems before they affect the customer could be classified as another component to the systematic-response approach.

True

For a single channel queuing system with finite queue, the value of λ may exceed μ because some potential customers are forced to balk.

True

For a standard service system to operate over the long run, the servers must be idle part of the time.

True

In a product layout, the bottleneck operation defines the capacity of the service.

True

In contrast to manufacturing, the aesthetics of the environment play a major role in the customer's perception of the service.

True

Information management has been the key in allowing services to meet customer demands without incurring the expense of excess inventory.

True

Locating a public service facility in an area that contains a large number of individuals for whom distance would be a strong barrier will maximize facility utilization.

True

Managing evidence of information is the key to closing the gap between customer perception and service delivery.

True

Most forecasting models assume that the underlying pattern of behavior of their data will remain the same. The only component of error is attributable to random fluctuations that are not under the control of anyone.

True

One reason exponential smoothing is so popular is the ease with which it can be made to accommodate trend and seasonality in its forecasts.

True

One role of holding inventory is to hedge against anticipated increases in the cost of the inventoried items.

True

Patients waiting for heart transplants are an example of an inventory model that has a backorder cost of zero.

True

Simulation allows time compression, doing in seconds what would otherwise require years of actual observation.

True

Simulation can be viewed as a laboratory for experimenting with service systems.

True

Southwest Airlines delivered high service value because of employee retention and productivity.

True

Subjective models are used to assess the future impact of changing demographics.

True

The "line of visibility" found in a service blueprint separates the front office operations from the back office operations.

True

The cost of formulating, developing, and testing regression models, plus the expertise required to interpret results, often dictates the use of this model only for medium-term or long-term forecasting.

True

The line-balancing problem attempts to resolve the inconsistencies in the capacities at various stages in a product layout.

True

The location set covering problem locates facilities to minimize the distance that the most distant customer would travel to reach a facility (known as maximal service distance).

True

The majority of difficulties in customer/employee interactions are caused by unrealistic expectations of the customers.

True

The most important function of SERVQUAL is to keep a record of service quality trends through periodic customer surveys.

True

The relative location problem deals with the problem of allocating n departments to n locations. Complete enumeration is time consuming because there are a total of n! possible arrangements.

True

The selection of candidate independent variables for a regression model to forecast motel occupancy requires input from knowledgeable marketing personnel.

True

The service profit chain argues that internal quality drives leads to profitability and growth.

True

The term queue configuration refers to the number of queues, their locations, their spatial requirements, and their effect on consumer behavior.

True

The walk-through audit (WtA) focuses on the effectiveness of each stage in the service delivery process.

True

When the customer's role is built into the service delivery system, he or she is said to be a coproducer.

True

Yield management is the process of allocating a fixed perishable resource to several market segments in the most profitable manner.

True

When a process appears to be functioning properly when, in fact, it is out of control, the type of error and injured party are identified as ________.

Type II error and consumer's risk

Which one of the following is not an approach to service recovery?

Unconditional guarantee.

Which of the following is not a characteristic of firms using yield management?

Variable capacity.

Because customers participate directly in the service process, the success of technological innovation is dependent upon ________.

customer acceptance

A gap in service quality is not the difference between ________.

customer expectations and management's perception of the delivered service

The total inventory for a retailer is comprised of in-transit inventory, safety stock, and ________ inventory.

cyclical

Service processes can be classified according to each of the following, except the ________.

degree of customer satisfaction

The strategy of segmenting demand is feasible only when ________.

demand is not from a homogeneous source

All of the following are characteristics of a service organization with an inverted T structure, except ________.

limiting discretion of contact personnel

Little's Law states that a relationship exists between ________.

line length and waiting time

Competitive clustering is common to the ________ industry.

lodging

Queuing models can help explain all of the following, except ________.

mean arrival rate

The line balancing problem arises because of ________.

mismatched capacities of the various operations

A health club's offering a reduced rate membership for students to workout before 4:00 p.m. on weekdays is ________.

promoting off-peak demand

Service level influences ________.

reorder point and safety stock

Pooling of servers results in reduced waiting time because ________.

servers are utilized better

A product layout would facilitate the concept of _______

service in series

On-line networks between suppliers and their customers create a barrier to entry.

true

Ordering from L.L. Bean by telephone is an example of a service firm maximizing opportunities for economies of scale.

true

Porter's five forces analysis is used at the industry level to determine competitive intensity

true