Chapter 11 Managing Capacity and Demand
1) The use of a ski-resort hotel for business conventions during the summer is an example of using the complementary service strategy.
Answer: FALSE
Difficulty: 1 Easy
Topic: Strategies for Managing Demand
Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.
Bloom’s: Remember
AACSB: Communication
Accessibility: Keyboard Navigation
2) Overbooking is a strategy that can be used to smooth demand.
Answer: FALSE
Difficulty: 2 Medium
Topic: Strategies for Managing Demand
Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.
Bloom’s: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
3) The strategy of segmenting demand to reduce variation makes use of the fact that demand for a service seldom is derived from a homogeneous source.
Answer: TRUE
Difficulty: 2 Medium
Topic: Strategies for Managing Demand
Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.
Bloom’s: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
4) Differential pricing is an attempt to make peak usage periods unattractive by imposing a penalty on the consumer for using the service during peak periods.
Answer: FALSE
Difficulty: 1 Easy
Topic: Strategies for Managing Demand
Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.
Bloom’s: Remember
AACSB: Communication
Accessibility: Keyboard Navigation
5) Yield management is the process of allocating a fixed perishable resource to several market segments in the most profitable manner.
Answer: TRUE
Difficulty: 1 Easy
Topic: Yield Management
Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.
Bloom’s: Remember
AACSB: Communication
Accessibility: Keyboard Navigation
6) The workshift scheduling problem is important in service organizations that face a cyclic demand for their services.
Answer: TRUE
Difficulty: 2 Medium
Topic: Strategies for Managing Capacity
Learning Objective: 11-03 Use a linear programming model to prepare a weekly workshift schedule with two consecutive days off for each employee.
Bloom’s: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
7) Workshift scheduling attempts to deal with the service utilization problem by controlling the demand for the service and partitioning it so that utilization is uniform.
Answer: FALSE
Difficulty: 2 Medium
Topic: Strategies for Managing Capacity
Learning Objective: 11-03 Use a linear programming model to prepare a weekly workshift schedule with two consecutive days off for each employee.
Bloom’s: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
8) A drawback to increased consumer participation is the fact that service quality is no longer completely under the control of the provider of the service.
Answer: TRUE
Difficulty: 2 Medium
Topic: Strategies for Managing Demand
Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.
Bloom’s: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
9) When peaks of activity are persistent and predictable such as meal times for restaurants, off-duty personnel can be placed on standby to supplement regular employees.
Answer: FALSE
Difficulty: 2 Medium
Topic: Strategies for Managing Capacity
Learning Objective: 11-04 Prepare a work schedule for part-time employees.
Bloom’s: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
10) Cross-training employees as a strategy to increase flexibility is feasible only when there exist tasks, the demands for which peak at different times.
Answer: TRUE
Difficulty: 2 Medium
Topic: Strategies for Managing Capacity
Learning Objective: 11-04 Prepare a work schedule for part-time employees.
Bloom’s: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
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