OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN DECISIONS & CASES 7Th EDITION BY ROGER - Test Bank

OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN DECISIONS & CASES 7Th EDITION BY ROGER – Test Bank

 

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Sample Questions Are Posted Below

 

Chapter 05 Service Delivery System Design Answer Key

Multiple-Choice Questions
 

1. Which of the following is NOT a general characteristic of a service?
   A.Production and consumption are simultaneous.
   B. The service can be transported.
   C. No resale is possible.
   D. The service cannot be stored.

 

 

LO: 5.1

Topic: Defining Service

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Except for electricity and communications, services cannot be transported (though producers can be—see Table 5.1).

 

 

 

2. Which of the following are characteristics of a low-contact service delivery system?
   A.Lower costs and more standardization.
   B. Greater flexibility, need for people who are highly skilled in interpersonal relations, and a customer orientation.
   C. Need for people with a high level of technical skills oriented toward efficient processing, well-defined procedures, and smooth flow.
   D. Both a and c.
   E. All of the above.

 

LO: 5.4

Topic: Customer Contact

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Flexibility, strong interpersonal skills, and customer orientation are not characteristics of a low-contact system.

 

 

 

3. The degree of customer contact measures
   A.the amount of time the customer is separated from the service delivery system.
   B. the amount of time the customer is in the service delivery system.
   C. the customization abilities of the service system.
   D. none of the above.

 

LO: 5.4

Topic: Customer Contact

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: The degree of customer contact measures the amount of time for the service to be produced, delivered, and consumed by the customer—in other words, the amount of time the customer is in the service delivery system.

 

4. A service recovery process
   A.follows every service transaction.
   B. is an implicit service.
   C. is rapid compensation for a service failure.
   D. is none of the above.

 

 

LO: 5.5

Topic: Service Recovery and Guarantees

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Swift service recovery is necessary for an effective recovery process.

 

5. A service guarantee
   A.is like a product guarantee except that it is for a service.
   B. specifies exactly what the service delivery system must provide.
   C. builds loyalty.
   D. all of the above.

LO: 5.5

Topic: Service Recovery and Guarantees

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: All are true of service guarantees (see Section 5.5).

 

 

6. A good service guarantee
   A.is often an advertising gimmick.
   B. is an honest assurance that the customer will be satisfied.
   C. has many stipulations and conditions.
   D. costs a lot.

LO: 5.5

Topic: Service Recovery and Guarantees

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Effective guarantees should not be viewed as any form of gimmick or contain many stipulations or conditions.

 

7. Which of the following is NOT a correct statement?
   A.A service is produced and consumed simultaneously.
   B. Services are provided in a bundle of services and goods.
   C. The service delivery system should be designed primarily around the employees in the system.
   D. Low-contact services can usually be made more efficient than high-contact services.

LO: 5.3

Topic: Service Delivery System Matrix

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: The service delivery system is designed around the customer.

 

8. Which of the following is NOT a differentiator between manufacturing and service operations?
   A.Transportation
   B. Customer contact
   C. Resale
   D. Cost per unit

LO: 5.1

Topic: Defining Service

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Cost per unit is not a differentiator, though all of the others are (see Table 5.1).

 

 

9. Which of the following is NOT a characteristic of service operations?
   A.Intangible output.
   B. The buyer can perform part of the production.
   C. The product cannot be stored.
   D. Ownership is transferred at time of purchase.

LO: 5.1

Topic: Defining Service

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Because services are intangible, ownership generally is not transferable.

 

 

 

 

10. Which of the following is NOT an element of the service product bundle?
    A.Facilitating goods
    B. Explicit service
    C. Implicit service
    D. Value of goods/service

LO: 5.2

Topic: Service Product Bundle

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: A, B, and C are the three elements of the service product bundle.

 

 

11. ____-contact services require employees with administrative/technical skills and efficient processing routines.
    A.High
    B. Low
    C. Moderate
    D. More than one of the above are true.

LO: 5.4

Topic: Customer Contact

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: In general, low-contact positions call for technical skills more than interpersonal skills. Routine methods are key to low-contact service efficiency.

 

 

12. An example of a service business/organization that has a high degree of customer contact, high customization, and a high degree of labor intensity is
    A.retailing.
    B. hotels.
    C. law practice.
    D. schools.

LO: 5.4

Topic: Customer Contact

Difficulty: 3 Hard
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Compared to the other choices, a law practice has far more contact, customization, and labor intensity.

 

 

 

13. Estate planning would be an example of
    A.a co-routed service.
    B. a customer-routed service.
    C. a provider-routed service.
    D. none of the above.

 

LO: 5.3

Topic: Service Delivery System Matrix

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Estate planning is typically highly customized with many process pathways and customers having a great deal of decision power.

 

 

 

14. The service profit chain shows that _____ is the direct link to profitability.
    A.customer loyalty
    B. customer satisfaction
    C. customer contact
    D. employee productivity

 

LO: 5.7

Topic: Service Profitability and Employees

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: B, C, and D are elements, but it is customer loyalty that ultimately drives profitability.

 

 

 

 

15. Which of the following is NOT included in internal service quality in the service profit chain?
    A.Workplace design
    B. Job design
    C. Employee selection
    D. Product design

 

 

LO: 5.7

Topic: Service Profitability and Employees

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Internal service quality includes workplace design, job design, employee selection and development, employee rewards and recognition, and tools for serving customers.

 

16. Which of the following is NOT an example of a high-contact service?
    A. Retail trade
    B. Personal services
    C. Business services
    D. Auto repair

    LO: 5.4

Topic: Customer Contact

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: The actual auto repair is not done with customer involvement, whereas with the other three choices the customer typically is involved.

 

17. There are key differences between service and manufacturing organizations. Which of the following is true regarding these differences?
    A. Most service organizations cannot inventory their services to absorb fluctuations in customer demand.
    B.  Most manufacturing organizations easily permit simultaneous production and consumption of system output.
    C.  Most manufacturing organizations are typically located closer to the customer, such as a central business district location, due to the simultaneity of consumption and production.
    D. Service organizations can easily store current capacity in the form of inventories.

    LO: 5.1

Topic: Defining Service

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Services are simultaneously produced and consumed and are intangible, meaning that their processes create value for customers by performing transformations that do not result in a physical entity. Services, therefore, cannot be inventoried.

18. There are key differences between a service and a product. Which of the following is true regarding these differences?
    A. Low-contact services as well as manufacturing require employees who are flexible, personable, and willing to work with the customer.
    B.  The degree of customer contact is usually higher for manufacturing organizations than for service organizations.
    C.  There is a greater degree of customer participation in the manufacture and sale of goods than there is in the sale of services.
    D. Service firms commonly require employees that are more flexible, personable, and willing to work with the customer than is true at manufacturing firms.

LO: 5.1

Topic: Defining Service

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Only D is true: customer-focused interpersonal skills are generally more important to services than manufacturing.

 

 

 

19. An example of an implicit service is
    A. the safe trip provided by Southwest Airlines to its passengers.
    B.  courteous service provided by a National Rental Car agent.
    C.  the state-of-the-art aircraft utilized by Delta Airlines.
    D.  all of the above.

LO: 5.2

Topic: Service Product Bundle

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Implicit services (psychological benefits) are the customer’s feelings about the experience. All of the above are implicit services.

 

 

 

20. Service recovery refers to
    A. the ability to quickly restore service following a service failure and provide compensation.
    B.  the reliance on cryptography to protect commercial activities.
    C.  security privacy and the protection of intellectual property.
    D.  the level of confidence users hold that service systems will operate as intended without unanticipated failures or problems.

LO: 5.5

Topic: Service Recovery and Guarantees

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Service recovery consists of the actions necessary to compensate for the failure and restore, if possible, the service requested by the customer.

 

 

 

 

21. Which of the following statements concerning service guarantees is FALSE?
    A. A service guarantee is a mechanism to build customer loyalty.
    B.  A service guarantee is a way to avoid compensating customers for a service failure.
    C.  A service guarantee is a tool to clarify exactly what the service must provide.
    D.  A service guarantee is a way to define a service and ensure satisfactory delivery to the customer.

LO: 5.5

Topic: Service Recovery and Guarantees

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Service guarantees delineate what the payout and service recovery actions will be if the promise is not fulfilled.

 

 

 

 

 

 

22. According to the service matrix proposed by Collier and Meyer, ATM services are categorized as
    A. customer-routed services.
    B.  co-routed services.
    C.  provider-routed services.
    D.  none of the above.

LO: 5.3

Topic: Service Delivery System Matrix

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: ATMs provide limited choices to customers with little discretion (see Figure 5.2).

 

 

23. Which of the following statements is NOT true about customer contact and the customer contact matrix?
    A. High-contact services are referred to as buffered core because these processes are buffered or removed from interaction with the customer.
    B.  Operations must be concerned with customer contact because higher contact levels can introduce variability into the process.
    C.  In the middle ground of customer contact, permeable systems have processes that are penetrated by customers in fairly restricted ways.
    D. High contact levels may be costly in terms of lost efficiency, but they offer opportunities to increase sales to customer resulting in increased revenues.

LO: 5.4

Topic: Customer Contact

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Low-contact services are considered buffered core (see Figure 5.3).

 

 

 

24. The most important factor for improving employee satisfaction in the service-profit chain is
    A. employee retention.
    B.  revenue growth.
    C.  internal service quality.
    D.  customer satisfaction.

LO: 5.7

Topic: Service Profitability and Employees

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Internal service quality drives employee satisfaction (see Figure 5.4).

 

 

25. Which of the following is a characteristic of high-contact services?
    A. High-contact services are used when face-to-face interaction is not required.
    B.  High-contact services require employees with administrative/technical skills and efficient service delivery methods.
    C.  High-contact services can work at average demand levels.
    D.  High-contact services require higher prices and more customization.

LO: 5.4

Topic: Customer Contact

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: High-contact services do require higher prices and more customization due to the variable nature of the service.

 

 

 

 

26. Researchers Schlesinger and Heskett propose that service organizations
    A. value investment in employees as much or more than investment in technology.
    B.  link compensation and performance for employees at all levels.
    C.  use technology to support front-line employees, not to monitor or replace them.
    D.  do all of the above.

LO: 5.6

Topic: Technology and Globalization of Services

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: All of the above are true (see Section 5.6).

 

 

 

27. Which of the following is the main intent of the service delivery system matrix?
    A. It illustrates the continuum of interaction between marketing and operations.
    B.  It illustrates the strategic choices in service delivery system design.
    C.  It illustrates the interaction between customer wants/needs and the service recovery plan.
    D.  It illustrates the complexity and customization required of provider-routed processes.

LO: 5.3

Topic: Service Delivery System Matrix

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: The matrix shows the strategic choices (customer-routed, co-routed, provider-routed) and how they should align with customer wants/needs (see Figure 5.2).

 

 

 

 

 

 

 

28. Medical services are an example of which of the following?
    A. Customer-routed services
    B.  Co-routed services
    C.  Patient-routed services
    D.  Provider-routed services

LO: 5.3

Topic: Service Delivery System Matrix

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Medical and stockbroker services are common examples of co-routed services. For the great majority of medical services, the customer has some decision-making power.

 

 

 

29. Consider the following two statements regarding technology in services:
    (1) Increased automation can have a negative effect on sales.
    (2) Technology is less vital to service delivery than to manufacturing.

    A.  According to the text, both statements are correct.
    B.  According to the text, both statements are incorrect.
    C.  According to the text, only statement (1) is correct.
    D.  According to the text, only statement (2) is correct.

LO: 5.6

Topic: Technology and Globalization of Services

Difficulty: 3 Hard
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Automation can change the nature of the service and reduce the number of selling opportunities. And technology has profound effects on how services are delivered.

 

 

 

 

30. Which of the following is a common potential benefit of outsourcing services?
    A. Increased control over the service delivery.
    B.  Increased ability to focus on core competencies.
    C.  Decreased need to attend to people (customers of the service) allowing greater focus on processes.
    D. Decreased need to control the quality of the service because it is outsourced.

LO: 5.6

Topic: Technology and Globalization of Services

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Potential upsides include lower costs and increased focus on core competencies; downsides include coordination costs and loss of control. Service outsourcing requires attention to both people and processes. Quality control can be more challenging and require additional mechanisms to ensure service quality.

 

 

31. Which of the following is NOT a finding of research on global offshoring of services?
    A. Services involving transaction processing are commonly offshored and are viewed as commodity services.
    B. The global supply of talented service workers may be shrinking, causing organizations to move fast to hire them.
    C.  Global service providers have proven the ability to deliver consistently high quality, explaining a big part of outsourcing’s popularity.
    D.  Engineering, legal services, and analytical work are leading categories of commonly offshored service work.

LO: 5.6

Topic: Technology and Globalization of Services

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Research indicates that global service providers do not deliver consistently good quality.

 

 

 

 

32. Which of the following is NOT true regarding service recovery and guarantees?
    A. Service failure can result in a satisfactory overall experience for the customer if the recovery is prompt and done well.
    B.  A service guarantee can motivate employees to deliver high-quality service.
    C.  Research indicates open-ended guarantees are more effective with customers because they don’t spell out exactly the service recovery plan.
    D.  Service guarantees are a source of insight to how the service delivery system can be improved.

LO: 5.5

Topic: Service Recovery and Guarantees

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback:  Better guarantees do spell out precisely what the service recovery will be.

 

 

 

33. Which of the following is NOT given as a source of customer-introduced variability to a service delivery system?
    A. Uncertainty in what customers will prefer from the service product bundle.
    B.  Uncertainty in the ability of customers to participate in the service.
    C.  Uncertainty in the customer’s willingness to interact with back-office service providers.
    D.  All of the above are sources of customer-introduced variability.

LO: 5.1

Topic: Defining Service

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: Customers do not typically interact with back-office service providers, so C is not a source of variability.

34. Which of the following statements is FALSE?
    A. Front-office services require the presence of or interaction with the customer.
    B.  The magazines offered in bank lobby can affect the implicit service.
    C.  Employees hired for back-office work can often get by with less interpersonal skill.
    D.  Service delivery design should be aimed only at external customers, not at employees who may be customers of internal services.

LO: 5.3

Topic: Service Delivery System Design

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: All of the concepts and tools from Chapter 5 apply equally well to internal functions providing services to internal customers (employees) such as payroll services or human resource services.

 

 

 

35. Which of the following is considered a back-office process?
    A. A follow-up phone call to a computer repair customer for information not gathered when the computer was dropped off for repair.
    B.  A customer picking up a furniture purchase from a store’s loading dock.
    C.  Servicing a hotel guest’s room (emptying trash, replacing towels) while the guest is out.
    D.  All are considered back-office processes.

LO: 5.1

Topic: Defining Service

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: A and B both require interaction with the customer and are therefore considered front-office processes.

 

 

 

36. Concerning grocery shopping experiences, which of the following best represents the concept of the implicit service?
    A. The superior selection available from a large grocery store.
    B.  Reduced levels of antibiotics used in the production of organic beef.
    C.  Grocery carts designed to look like race cars to appeal to children.
    D.  A sense of community when buying from a local co-op.

LO: 5.2

Topic: Service Product Bundle

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: D best represents a psychological benefit. The other choices are explicit or facilitating goods.

 

 

 

 

 

 

 

 

37. Which of the following best completes this sentence? A service guarantee
    A. is useful as an advertising ploy to attract additional customers.
    B.  is an honest assurance that the customer will be satisfied.
    C.  needs to contain a variety of stipulations and conditions to be cost effective.
    D.  is all of the above.

LO: 5.5

Topic: Service Recovery and Guarantees

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Service guarantees are not advertising gimmicks and should not contain many stipulations and conditions.

 

 

38. Which of the following is correct concerning high-contact services?
    A. To increase the efficiency of high-contact services, the organization should look to reduce the amount of customer-introduced uncertainty by limiting customization.
    B.  It is easier to smooth the peaks and valleys of demand for high-contact services than for low-contact services.
    C.  High-contact services are generally less variable and easier to price competitively.
    D.  All of the above.

LO: 5.4

Topic: Customer Contact

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Understand
Feedback: High-contact services are more variable and require higher pricing, and providers must respond immediately to demand spikes. Although inefficient compared to low-contact services, efficiency gains are possible by restricting customization options.

 

 

 

39. A visit to Disney World would be classified as which type of service?
    A. A provider-routed service
    B.  A co-routed service
    C.  A customer-routed service
    D.  None of the above

LO: 5.3

Topic: Service Delivery System Matrix

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Although Disney prohibits certain customer behaviors and denies access to “off stage” operations, it does offer many process pathways and jumbled flows. It also allows customers to customize their visits to a great degree.

 

 

 

 

 

 

 

 

 

True/False Questions

40. The customer is a part of the service delivery process and may introduce inefficiencies into the service delivery system.
    TRUE

LO: 5.1

Topic: Defining Service

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: As customer contact increases, so do variability and resulting inefficiencies.

 

 

41. Implicit service is also known as tangible service.
    FALSE

LO: 5.2

Topic: Service Product Bundle

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Implicit service is considered a psychological benefit—how customers feel—and is therefore intangible.

 

 

42. Service guarantees are only for consumers outside the firm, and do not apply to internal customer relationships within a firm.
    FALSE

LO: 5.5

Topic: Service Recovery and Guarantees

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Service guarantees are valuable any time there is a service provider–customer relationship.

 

 

43. High-contact services are more likely to be front-office operations, and low-contact services are more likely to be back-office operations.
    TRUE

LO: 5.4

Topic: Customer Contact

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Front-office operations require customer interaction and therefore more likely to be high-contact. Back-office operations do not involve customers directly and more likely to be low-contact.

 

 

44. A small improvement in customer loyalty can substantially improve the profitability of a service firm.
    TRUE

LO: 5.7

Topic: Service Profitability and Employees

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Even a 5% increase in loyal customers can increase profits in many industries by 25–85%.

 

 

45. McDonald’s uses what Levitt refers to as “the job shop type approach to service.”
    FALSE

LO: 5.6

Topic: Technology and Globalization of Services

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Levitt describes McDonald’s as a production-line approach to service delivery.

 

 

46. Co-routed services offer a larger amount of choices to customers than do customer-routed services.
    FALSE

LO: 5.3

Topic: Service Delivery System Design

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Customer-routed services offer customers the greatest degree of decision-making power and customization.

47. According to the service profit chain, employees are more likely to be satisfied when management works to improve internal service quality.
    TRUE

LO: 5.7

Topic: Service Profit Chain

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Internal service quality is the direct link to employee satisfaction.

 

 

 

48. The major difference between the service delivery system matrix and the product-process matrix is that service process design generally does not vary with customer volume.
    TRUE

LO: 5.3

Topic: Service Delivery System Matrix

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Volume is not a major factor is service design because service processes tend to be similar regardless of volume or capacity.

 

 

49. Outsourcing is the export of service activities to other countries.
    FALSE

LO: 5.6

Topic: Technology and Globalization of Services

Difficulty: 1 Easy
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: Outsourcing is moving services outside the organization; offshoring is the correct term for outsourcing services to another country.

 

 

 

 

Essay Questions

50. Identify some of the prominent differences between service operations and manufacturing operations. Describe the challenges that are unique to service operations, and describe some methods to overcome them.

LO: 5.1

Topic: Defining Service

Difficulty: 2 Moderate
AACSB: Reflective thinking, written communication
Bloom’s: Understand
Feedback: See below.

Table 5.1 provides some of the differences between manufacturing and service operations. Some of the challenges unique to service operations are (i) Most service transactions are difficult to quantify or measure when compared to manufacturing operations; (ii) service operations are often characterized by simultaneous production and consumption in which the customer is a co-producer in the service process and, therefore, the customer can introduce uncertainty into the system; (iii) no resale is possible in the case of service operations and hence they are consumed as they are delivered; (iv) services cannot be held in inventory and cannot be stored, so they also cannot be transported (although some services, particularly electronic services, can be delivered remotely).

 

 

51. Design a service product bundle for a new airline company operating between Minneapolis-St. Paul International Airport (MSP) and Los Angeles International Airport (LAX). The route between MSP and LAX is extremely competitive with several major airlines providing daily service. How can your design help the new airline company dominate the existing competition?

 

LO: 5.2

Topic: Service Product Bundle

Difficulty: 2 Moderate
AACSB: Reflective thinking, written communication
Bloom’s: Synthesize
Feedback: See below.

The service product bundle could consist of these elements:
The tangible service or the explicit service: The flight entertainment system, comfortable seating facility, the feel of the ride, prevention of lost baggage, and the food service provided in the aircraft are some examples of tangible services. The new airline company can provide free lunches/dinners, offer various flight entertainment options (e.g., personalized TV/Internet screens), cushioned leather seats, and similar features to differentiate from existing competition.
The psychological service or the implicit service: Friendly and courteous flight attendants, comfortable and secured ride, and the like are examples of implicit service provided by the airline company. The airline company can provide these services by locating well-trained staff on each of the flights.
The physical goods or facilitating goods: The aircraft carrier is the major facilitating good in this system, and it is recommended to have a single type of aircraft (e.g., Southwest Airlines uses Boeing 737 aircraft) to facilitate maintaining and operating these aircraft. This can also provide some competitive advantage to the new airline company by minimizing the turnaround times due to simple operating procedures.  Food, beverages, and the like would also be included in this category.
(The answers to this question will vary, and the answer provided is just one suggested answer. Refer to Sections 5.2 and 5.3 to augment this answer.)

52. What are the five types of customer-induced variability that affect service operations, according to Frei?

LO: 5.4

Topic: Customer Contact

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: See below.

(1) Arrival variability
(2) Request variability
(3) Capability variability
(4) Effort variability
(5) Subjective preference variability
(Refer to Table 5.2 to augment this answer.)

 

53. What are the key findings of the report by Duke University and Booz & Hamilton on global offshoring of services?

 

 

LO: 5.6

Topic: Technology and Globalization of Services

Difficulty: 2 Moderate
AACSB: Reflective thinking
Bloom’s: Remember
Feedback: See below.

 

(1) Transaction-intensive offshored services are becoming commoditized.
(2) Offshoring is increasingly common for professional service work.
(3) Talented service workers around the world are being captured by fast-moving offshoring firms.
(4) Many global service providers to offshoring firms do not provide consistent quality.
(Refer to Section 5.6 to augment this answer.)

 

 

 

54. Describe the difference in service delivery system design for customer-routed services versus provider-routed services.

 

LO: 5.3

Topic: Service Delivery System Design

Difficulty: 2 Moderate
AACSB: Reflective thinking, written communication
Bloom’s: Understand
Feedback: See below.

 

In customer-routed services, the service delivery system consists of many process pathways.  Flows of work or customers tend to be jumbled and complex, with many exceptions (i.e., each customer or customer project is different).  In provider-routed services, there are a limited number of process pathways.  Flows of work or customers tend to be linear and with low complexity (i.e., most customers or customer-related work tasks are similar to one another). (Refer to Figure 5.2 to augment this answer.)

 

 

 

 

55. Describe differences in sales opportunities and production efficiency for varying levels of customer contact.

 

LO: 5.4

Topic: Customer Contact

Difficulty: 2 Moderate
AACSB: Reflective thinking, written communication
Bloom’s: Understand
Feedback: See below.

 

As customer contact increases, from mail and Internet to phone, and then to in-person with increasing levels of customization, sales opportunity increases significantly while production efficiency decreases significantly.

(Refer to Figure 5.3 to augment this answer.)