SERVICE OPERATIONS
MANAGEMENT
CAPACITY MANAGEMENT
, What is Productive Capacity?
Productive capacity can take several forms in
services
– Physical facilities designed to contain
customers
– Physical facilities designed for storing or
processing goods
– Physical equipment used to process people,
possessions, or information
– Labor
– Infrastructure
Financial success in businesses that are
limited in capacity depends largely on how
capacity is used
, From Excess Demand to Excess
Capacity
Four conditions potentially faced by fixed-
capacity services:
Excess demand
– Too much demand relative to capacity at a given
time
Demand exceeds optimum capacity
– Upper limit to a firm’s ability to meet demand at a
given time
Optimum capacity
– Point beyond which service quality declines as more
customers are serviced
Excess capacity
– Too much capacity relative to demand at a given
time
, Capacity Management
Matching the amount of output that a
system is capable of achieving with
the demand placed on that system
Service capacity is a perishable
commodity.
MANAGEMENT
CAPACITY MANAGEMENT
, What is Productive Capacity?
Productive capacity can take several forms in
services
– Physical facilities designed to contain
customers
– Physical facilities designed for storing or
processing goods
– Physical equipment used to process people,
possessions, or information
– Labor
– Infrastructure
Financial success in businesses that are
limited in capacity depends largely on how
capacity is used
, From Excess Demand to Excess
Capacity
Four conditions potentially faced by fixed-
capacity services:
Excess demand
– Too much demand relative to capacity at a given
time
Demand exceeds optimum capacity
– Upper limit to a firm’s ability to meet demand at a
given time
Optimum capacity
– Point beyond which service quality declines as more
customers are serviced
Excess capacity
– Too much capacity relative to demand at a given
time
, Capacity Management
Matching the amount of output that a
system is capable of achieving with
the demand placed on that system
Service capacity is a perishable
commodity.
