Demand and capacity management decisions in services: How they impact on one another

Kenneth J. Klassen, Thomas R. Rohleder

Research output: Contribution to journalArticle

31 Scopus citations

Abstract

Service managers are continually challenged with balancing customer demand and service capacity. Recent studies have raised awareness of various demand and capacity management practices available to services, but little numerical work has been done to identify how these decisions work together and how they relate to one another. For instance, reducing prices may attract customers during a slow period, but the extent of impact this should have on cross-training staff is not clear. A simulation based on theoretical and empirical insights explores the impact of various decisions on profitability and operations. The decisions modelled include the impact of: automation, customer participation, cross training employees, informing customers about the operation, and others. It is shown that demand and capacity decisions do indeed impact on each other - sometimes in ways that are not initially obvious. Results provide useful thought-starters for service managers striving to improve their operations.

Original languageEnglish (US)
Pages (from-to)527-548
Number of pages22
JournalInternational Journal of Operations and Production Management
Volume22
Issue number5-6
DOIs
StatePublished - Aug 20 2002

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Keywords

  • Capacity
  • Demand
  • Service operations
  • Simulation

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Strategy and Management
  • Management of Technology and Innovation

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