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Module 1: Balancing Demand and Productive Capacity

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Balancing Demand and Productive Capacity - Part 2

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MODULE OVERVIEW

Be familiar with basic ways of managing demand.
Understand how to use marketing mix elements of price, product, place and promotion to smoothen out fluctuations in demand.
Know how to use waiting lines and queuing systems to inventory demand.

MANAGING DEMAND
Approaches to managing demand:
1) Take no action and leave demand to find its own levels
2) Use of marketing mix elements
— Reduce demand during peak periods
— Increase demand during low periods
3) Inventory demand using a queuing system all
4) Inventory demand using a reservations system
WAITING IS A UNIVERSAL PHENOMENON!
An average person may spend up to 30 minutes/day waiting in line—equivalent to over one week per year!
Nobody likes to wait
It's boring, time-wasting, and sometimes physically uncomfortable.
Physical and inanimate objects wait for processing, too.
Customers’ emails sit in customer service staff's inboxes, appliances wait to be repaired, and checks wait to be cleared at a bank.
MANAGING WAITING LINES
1) Rethinking design of queuing system
Queue configuration and virtual waits.
2) Tailoring queuing system to different market segments by urgency, price or importance of customer
3) Managing customers’ behavior and their perceptions of wait use the psychology of waiting to make waits less unpleasant
4) Installing a reservations system
use reservations, booking, or appointments to distribute demand
5) Redesigning processes to shorten the time taken in each transaction
by installing self-service machines
DIFFERENT QUEUE CONFIGURATION

Single line, sequential stages: Customer proceed through several serving operations
Parallel lines to multiple servers: Offer more than one service station
A single line to multiple servers: Commonly called as snake
Designated Lines: Involves assigning different lines to specific category of customer