Faced with Variable Demand and a Perishable Capacity, a Service

question 26

Multiple Choice

Faced with variable demand and a perishable capacity, a service manager can smooth demand by ________.

• A) using part-time help during peak hours
• B) scheduling workshifts to vary workforce needs according to demand
• C) increasing the customer self-service content of the service
• D) using reservations and appointments

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance.

Pretax Income

The amount of income earned by a business before paying income taxes.

Variable Costs

Expenses that change in proportion with the level of production or business activity, such as materials and labor directly involved in manufacturing.

Fixed Costs

Costs that remain constant for a set period of time, regardless of changes in the level of activity or volume of output.