Several strategies exist for managing the supply and demand of services. List the strategies for managing each and give an example of each strategy.
Several strategies can produce a better match between service demand and supply.
On the demand side, these strategies include the following:
a. Differential pricing: This will shift some demand from peak to off-peak periods. For example, low matinee movie prices and weekend discounts for car rentals.
b. Nonpeak demand: This can be cultivated. For instance, McDonald's pushes its breakfast service, and hotels promote minivacation weekends.
c. Complementary services: These can provide alternatives to waiting customers. For example, cocktail lounges in restaurants and automated teller machines in banks.
d. Reservation systems: These are one of the many ways to manage the demand level. For instance, airlines, hotels, and physicians employ them extensively.
On the supply side, these strategies include the following:
a. Part-time employees: They can serve peak demand. For example, colleges add part-time teachers when enrollment goes up and stores hire extra clerks during holiday periods.
b. Peak-time efficiency: These routines can allow employees to perform only essential tasks during peak periods. For instance, paramedics assist physicians during busy periods.
c. Increased consumer participation: This frees service providers' time. For example consumers can fill out their own medical records or bag their own groceries.
d. Shared services: These can improve offerings. For instance, several hospitals can share medical-equipment purchases.
e. Facilities for future expansion: This can be a good investment. For example, an amusement park can buy surrounding land for later development.