Concept explainers
THE CHALLENGES OF MANAGING SERVICES
Services can pose a variety of managerial challenges for managers-challenges that in manufacturing are either much less or nonexistent. And because services represent an increasing share of the economy, this paces added importance on understanding and dealing with challenges or managing services. Here are some of the main factors:
1. Jobs in service environments are often less structured than in manufacturing environments.
2. Customer contact is usually much higher in services.
3. In many services, worker skill levels are low compared to those of manufacturing workers.
4. Services area adding many new workers in low-skill entry-level positions
5. Employee turnover is often higher, especially in the low-skill jobs.
6. Input variability tends to be higher in many service environments than in manufacturing.
7. Service performance can be adversely affected by workers’ emotions, distractions, customers’ attitudes and other factors, many of which are beyond managers’ control
Because of these factors, quality and costs are more difficult to control, productivity tends to be lower, the risk of customer dissatisfaction is greater, and employee motivation is more difficult.
What managerial challenges do services present that manufacturing does not?
Want to see the full answer?
Check out a sample textbook solutionChapter 4 Solutions
Operations Management
- Primer Inc. offers plumbing and air conditioning services to customers in Kumasi, Ghana. The company’s product strategy is to solve the customer’s problem irrespective of what it takes, at the time the customer needs it solved. The company provides same day service for customers, and theaim is to make the customer happy before leaving.The services of the company are available 24 hours a day, 7 days a week for customers. There is no extra charge for requests made on holidays, odd hours of the day, or in festive seasons. The company aims to be available at the call of customers without charging a pesewa extra, even at times when rival firms won’t get out of bed. The company fixes the price of the service before it begins, and customers can be assured of no extra charges. Irrespective of the customer’s location in the city, Primer Inc. does not charge additional fees for transportation. For all services, the company provides a one year guarantee on all parts and labour used, whiles rival…arrow_forwardPrimer Inc. offers plumbing and air conditioning services to customers in Kumasi, Ghana. The company’s product strategy is to solve the customer’s problem irrespective of what it takes, at the time the customer needs it solved. The company provides same day service for customers, and theaim is to make the customer happy before leaving.The services of the company are available 24 hours a day, 7 days a week for customers. There is no extra charge for requests made on holidays, odd hours of the day, or in festive seasons. The company aims to be available at the call of customers without charging a pesewa extra, even at times when rival firms won’t get out of bed. The company fixes the price of the service before it begins, and customers can be assured of no extra charges. Irrespective of the customer’s location in the city, Primer Inc. does not charge additional fees for transportation. For all services, the company provides a one year guarantee on all parts and labour used, whiles rival…arrow_forwardPrimer Inc. offers plumbing and air conditioning services to customers in Kumasi, Ghana. The company’s product strategy is to solve the customer’s problem irrespective of what it takes, at the time the customer needs it solved. The company provides same day service for customers, and theaim is to make the customer happy before leaving.The services of the company are available 24 hours a day, 7 days a week for customers. There is no extra charge for requests made on holidays, odd hours of the day, or in festive seasons. The company aims to be available at the call of customers without charging a pesewa extra, even at times when rival firms won’t get out of bed. The company fixes the price of the service before it begins, and customers can be assured of no extra charges. Irrespective of the customer’s location in the city, Primer Inc. does not charge additional fees for transportation. For all services, the company provides a one year guarantee on all parts and labour used, whiles rival…arrow_forward
- CC Car Wash specializes in car cleaning services. The servicesoffered by the company, the exact service time, and the resources needed for each of them aredescribed in the table following: service description processing time resources used A. Wash Exterior car washing anddrying 10 min. 1 automated washingmachine B. Wax Exterior car waxing 10 min. 1 automated waxingmachine C. Wheel cleaning Detailed cleaning of all wheels 7 min. 1 employee D. Interior cleaning Detailed cleaning inside thecar 20 min. 1 employee The company offers the following packages to their customers: Package 1: Includes only car wash (service A). Package 2: Includes car wash and waxing (services A and B). Package 3: Car wash, waxing, and wheel cleaning (services A, B, and C). Package 4: All four services (A, B, C, and D).Customers of CC Car Wash visit the station at a constant rate (you can ignore any effects ofvariability) of 40 customers per day. Of these customers, 40 percent buy Package 1, 15…arrow_forwardjanitorial service, Mother’s Helpers, provide workers to clean office buildings during late evening hours using workers with two skill levels, 1 and 2. Each level 1 person is paid $12 per hour and each level 2 person is paid $8 per hour. The workers wash floors and vacuum offices. Each level 1 person can vacuum 9 offices per hour, whereas level 2 person can vacuum only 2 offices per hour. Each level 1 person can wash 2 floors per hour; whereas level 2 person can wash 3 floors per hour. In order to complete a new job in the allotted time, 18 offices must be vacuumed per hour and 12 floors must be washed per hour.arrow_forwardLynn Jennings is the IT manager at Lazy Eddie, a chain that specializes in beanbag chairs and recliners. She asked Jan Lauten, a senior systems analyst, to review the large number of printed reports that are distributed to Lazy Eddie’s 35 store managers. “Jan, I just can’t believe that our people really read all of those reports,” Lynn said. “We constantly add new reports, and we never seem to eliminate the old ones. Sometimes I think all we’re doing is keeping the paper companies in business!” Jan replied, “I agree, but what can we do? The managers say they want the reports, but I always see them stacked on top of file cabinets. I’ve never seen anyone read a report.” “I have an idea,” Lynn said. “I want you to come up with a procedure that requires users to review and justify their information needs to see if they really use the reports we send them. You could design a form that asks if the information still is required, and why. Try to get users to decide if a report is worth the…arrow_forward
- NewTel is a telephone company with a policy of filling positions internally through promotions, rather than hiring from outside. Until recently, the company had a strong engineering focus and tended to promote people to senior executive positions from the engineering areas. Consequently, almost all of the company's 14 senior executives joined the company over 20 years ago as junior engineers. There is increasing pressure on NewTel to become more market and service oriented. As a result, four people were hired last year from firms to fill new senior executive positions in marketing and service departments. The external hires were necessary because current employees were not sufficiently qualified. Now, there are signs of tension among senior executives, particularly during budget deliberations where there is limited discretionary spending on new corporate activities. The four new hires have been thwarted in their attempts to have the company invest more in marketing and customer…arrow_forwardI need a detailed explanation and assistance to solve this proble: A client asks his stockbroker to invest $100,000 for maximum annual income, subject to the three conditions: Spread the investment over no more than three different stocks. Put no more than 40 percent of the money into any one stock Put a minimum of $10,000 into an oil stock. The broker has identified three stocks for investment. Their estimated annual returns per share and price per share are shown in the following table: Stock Price per Share Estimate Annual Return per Share Oil $120 $11 Auto $52 $4 Pharmaceutical $18 $2 The client wishes to use LP to determine the optimal number of shares to buy for each stock, so as to maximize the total estimated return. a) Write down the decision variables. b) Write down the optimization statement for the objective function. c) Write down the constraints.arrow_forwardManagers can serve customers, but you have to hire part-time servers to provide good customer service. Especially if the business operation is 16 hours a day (Monday to Friday). Answer the following questions: 1. How many servers will you need to use to have one server running at all times? Remember that servers work about 10 hours a week. 2. Suppose there are two servers and a manager on staff all day and the store is open from 8 a.m. to 5 p.m. to 8 p.m. Calculate the daily service capacity if the average waiter can serve 15 cups of coffee in an hour and the manager can serve 4.a) What factors will improve employee productivity in the business?b) What could limit the service capacity of your cafeteria?arrow_forward
- Nicki Fenty Corporation manufactures a variety of beauty products in several departments andevaluates departments and departmental managers by comparing actual cost and output relativeto the budget. Departmental managers help create the budgets and usually provide informationabout input quantities for materials, labor, and overhead costs.Chante Moore is the manager of the department that produces lip gloss. Chante hasestimated these inputs for Lip gloss:Input Budget quantity per unit of outputDirect materials 8 poundsDirect manufacturing labour 30 minutesMachine time 24 minutesThe department produces about 100 units of lip gloss each day. Chante’s department alwaysgets excellent evaluations, sometimes exceeding budgeted production quantities. For each 100units of lip gloss produced, the company uses, on average, about 48 hours of directmanufacturing labor (eight people working 6 hours each), 790 pounds of material, and 39.5machine-hours.Top management of Nicki Fenty Corporation has…arrow_forward4. Comp-Mart, a personal computer retailer, sells and services personal computers. Its main customers are Small and medium sized business. Comp-Mart has 5 retail outlets in the New York metropolitan area, each of which faces roughly equal demand in terms of both the volume and mix of products, and services sold. Each store has one technician, who is responsible for all service required under the service contracts written by the store. Service is performed on-site at the customer's location. The average service time on-site is two hours. In addition, technicians must travel to the customer locations, which takes another 20 minutes on average. Both on-site service times and travel times vary, depending on the complexity of the service problem and the customer's location. Each store receives an average of 1.2 requests per day for service, though the actual number of requests is highly variable. (You can assume all these are the same for each store and that service requests arrive only…arrow_forward1.As the Operational Manager of an IT department, Defend the use of the MetroE POS and phone Systems from this perspective. 2.Give ONE advantage EACH for the POS and thephone.arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill EducationOperations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningProduction and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.