BA291 CH. 11

A service with a cost of overestimating demand of $10 and a cost of underestimating demand of $7 would have a critical fractile of 0.7. True or False True False

False

Smoothing demand involves improving forecasting techniques. True or False True False

False

The use of major sports stadiums for monster truck shows or county fairs is an example of partitioning demand. True or False True False

False

Managing capacity and demand is important because service capacity is perishable. True or False True False

True

Strategies for managing customer-induced variability fall into two categories: accommodation and reduction. True or False True False

True

Even after work shift scheduling, services still find themselves overstaffed at times because ______. Multiple Choice demand is variable, while shifts are rigid employees are not working 100% of the time costs are determined in dollars, not hours capacity and demand are not directly related

demand is variable, while shifts are rigid

Strategies for managing customer-induced variability do not include ______ variability. Multiple Choice effort request skill arrival

skill

Which of the following is not a way by which services can manipulate capacity to match demand? Multiple Choice Sharing resource with competitors. Increasing customer participation in the service. Adding complementary services (i.e. a bookstore that opens an espresso bar). Correct Cross training employees to perform different tasks.

Adding complementary services (i.e. a bookstore that opens an espresso bar).

Which of the following is not true for the linear programming formulation of the weekly workshift scheduling with days-off constraint? Multiple Choice The diagonal for the constraints contains zeros. The number of variables equals the number of constraints. Only one optimum solution results. The problem is solved for integer results.

Only one optimum solution results.

Yield management captures more of the revenue below the demand curve than does a fixed price. True or False True False

True

Which of the following is not a way by which services can manipulate demand to match capacity? Multiple Choice Using part-time help. Offering price incentives at off-peak times. Segmenting customers into distinct groups with different needs, and letting (or forcing) these groups to use the service at different times. Using reservation systems.

Using part-time help.

For the overbooking strategy, why is the optimal number of units (i.e. airline seats, hotel rooms) overbooked is not equal to the expected number of no-shows? Multiple Choice The costs associated with overbooking and under-booking are not equal. Hotels and airlines reserve some spots for important or emergency situations. It is illegal to excessively overbook. Variability in the number of no-shows makes the number difficult to calculate.

The costs associated with overbooking and under-booking are not equal.

When a frequent flyer, with a free award ticket, sees a vacant seat on the flight it implies that the airline has not suffered any revenue loss giving away a free ticket. True or False True False

True

Yield management is a combination of several demand manipulation strategies, such as reservations, demand partitioning, and overbooking. True or False True False

True

Which of the following is not a characteristic of a service for which yield management is appropriate? Multiple Choice Ability to sell services in advance. Ability to segment markets. Low marginal sales costs and high marginal capacity change costs. Underdeveloped information systems.

Underdeveloped information systems.