Characteristics Of The Service Industry

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Preamble In relation to capacity management in non-manufacturing environment, focus will be on the hotel industry and how it is managed. (Fitzsimmons and Fitzsimmons, 2004) in (Pullman and Rodgers, 2010) define capacity management as managing capacity and demand. (Taylor, 1980) however argues and puts a distinction to the two. He defines demand management as an art of influencing guests to use a service, whilst capacity management as a science of ensuring that there is sufficient capacity to meet this demand. In the context of the capacity function within the hospitality industry (Klassen and Rohleder’s, 2002) definition of capacity management of ‘ensuring sufficient capacity to meet this demand’ will be used. Beforehand, the broad…show more content…
The tactical perspective is the operational element of managing the capacity within the hotel and these will be more elaborated on. (Song, 2012) states that hospitality services services are perishable and are capacity constrained. He further goes on to say that these services are further plagued by critical fixed capacity factors that include time, labour, equipment, facilities and or a combination of the four. The design of the service can be arranged such that the service interaction time is reduced. A hotel can also use the self-service technique to reduce the amount of labour needed. This technique can be argued to be a key element in the express hotel business model (Corsten and Stuhlmann, 1998) give the above definition of capacity management in a service setting by adding the element of a time frame. This addition further ratifies one of the characteristics of perishability. As the product is produced and consumed simultaneously, the time aspect of capacity becomes imperative In a hotel, the volume of labour needed can be relative to a time related activity. There will be periods were the service need is high, a case in example being meal service periods, group check-inns and checkouts. Due to the industry nature of being labour intensive-there will be a high need for an increase in staff during these periods. However when service needs are low, the opposite will be true. During the evening, waitering
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