Chapter 11

When yield management is implemented which one of the following does not result: Select one: a. consumer surplus increases b. multiple prices are offered c. capacity is more fully utilized d. market for the service is segmented

a. consumer surplus increases

The strategy of segmenting demand is feasible only when: Select one: a. demand is not from a homogeneous source. b. demand is cyclic and predictable. c. arrivals for service are random. d. making appointments is impossible.

a. demand is not from a homogeneous source.

What one of the following is not a characteristic of yield management? Select one: a. Capacity is relatively fixed. b. There is one homogeneous customer class. c. The service is considered a perishable inventory. d. Demand fluctuates yet is somewhat predictable.

b. There is one homogeneous customer class.

A health club offering a reduced rate membership for students to workout before 4:00 p.m. on weekdays is: Select one: a. promoting off-peak demand. b. partitioning demand. c. using yield management. d. offering price incentives.

a. promoting off-peak demand.

A good overbooking strategy should: Select one: a. minimize the expected opportunity cost of idle service capacity. b. balance the expected opportunity cost of idle service capacity and expected cost of turning away customers who have reservations. c. minimize the expected cost of turning away reservations. d. none of the above; services should try to avoid overbooking.

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

The purpose of differential pricing is to: Select one: a. make peak period usage unattractive. b. make off-peak usage attractive. c. charge customers according to their ability to pay. d. adjust capacity to demand.

b. make off-peak usage attractive.

_________ variability is not one of the five sources of customer-induced variability. Select one: a. Arrival b. Capability c. Effort d. Demand

d. Demand

In using the critical fractile criterion P(d<x) = Cu/(Cu + Co) for overbooking, the 'd' refers to: Select one: a. cost of overestimating demand. b. cost of underestimating demand. c. number of rooms overbooked. d. number of no-shows based on past experience.

d. number of no-shows based on past experience.

Bars that offer happy hours in the afternoon are using the strategy of: Select one: a. creating adjustable capacity. b. developing complementary services. c. increasing customer participation. d. promoting off-peak demand.

d. promoting off-peak demand.

________ is not a characteristic appropriate for a yield management strategy. Select one: a. Relatively fixed capacity b. Steady demand c. Ability to segment markets d. Products sold in advance

b. Steady demand

_______ is not a strategy for accommodating of customer-induced variability. Select one: a. Provide generous staffing b. Cross-train employees c. Reward increased effort d. Do work for customers

c. Reward increased effort

Which one of the following is not a characteristic of firms using yield management? Select one: a. ability to segment their market b. perishable inventory c. variable capacity d. product sold in advance

c. variable capacity

Faced with variable demand and a perishable capacity, a service manager can smooth demand by: Select one: a. using part-time help during peak hours. b. scheduling workshifts to vary workforce needs according to demand. c. increasing the customer self-service content of the service. d. using reservations and appointments.

d. using reservations and appointments.

Several approaches to demand management exist, but only _______ seeks to maximize revenue. Select one: a. promoting off-peak demand b. reservation systems c. offering price incentives d. yield management

d. yield management

Which of the following is not a strategy for managing capacity? Select one: a. Developing complementary services b. Using part-time employees c. Forecasting demand d. Scheduling shifts

a. Developing complementary services

A restaurant that features special lunchtime combo meals is providing all but one of the following benefits? Select one: a. Promotes off-peak demand b. Increases customer satisfaction c. Decreases service times d. Segment demand

a. Promotes off-peak demand

For a chase demand strategy which of the following does not have a high trade-off? Select one: a. Employee utilization b. Labor-skill level c. Labor turnover d. Supervision required

b. Labor-skill level

Which one of the following four steps in "daily workshift scheduling" is out of order? Select one: a. Forecast demand. b. Convert to operator requirements. c. Assign operators to shifts. d. Schedule shifts.

c. Assign operators to shifts.

Which of the following strategies is inappropriate for managing capacity and demand? Select one: a. Smooth customer demand by offering price incentives. b. Scheduling staff to meet variations in forecasted customer demand. c. Decrease customer participation in the service process. d. Promoting off-peak use of facilities.

c. Decrease customer participation in the service process.

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? Select one: a. Offer an upgraded cabin at a reduced price. b. Attempt to steer the passenger to an available date. c. Overbook the cabin. d. Offer a downgraded cabin with special privileges such as a $100 certificate for use in the casino.

c. Overbook the cabin.