Test Bank ― Chapter 9 Page 1
Essentials of Services Marketing, 2nd Edition
Jochen Wirtz, Patrica Chew and Christopher Lovelock
Chapter 9
Balancing Demand against Productive Capacity
GENERAL CONTENT
Multiple Choice Questions
1. Which of the following is NOT one of the conditions that fixed-capacity firms may
face?
a. Excess capacity.
b. Demand exceeds desired capacity.
c. Demand and supply are well-balanced.
d. Ideal demand exceeds capacity.
e. Excess demand.
2. Which of the following is NOT one of the productive capacity forms in a service
context?
a. Physical facilities designed to contain customers
b. Physical equipment used to process people, possessions, or information
c. Customers
d. Labor
3. Which of the following is the correct action for a firm to take that wants to reduce
demand and has insufficient capacity?
a. Take no action.
b. Consider override for most desirable segments.
c. Consider priority systems for most desirable segments.
d. Increase prices or encourage use in other time slots.
e. Lower prices selectively.
4. Which of the following is NOT one of the ways to change the overall level of capacity
to match demand variations?
a. Use part-time employees.
b. Ask customers to share.
c. Invite customers to perform self-service.
d. Cross-train employees.
e. Share facilities with the supplier.
Essentials of Services Marketing, 2nd Edition
Jochen Wirtz, Patrica Chew and Christopher Lovelock
5. All of the following are questions to ask about demand patterns and their underlying
causes EXCEPT ____________.
a. Do demand levels follow a predictable cycle?
b. What are the underlying causes of these cyclical variations?
c. How much demand are competitors receiving?
d. Do demand levels seem to change randomly?
e. Can demand for a particular service over time be disaggregated by market
segment?
6. Which of the following is NOT one of the five basic approaches to managing
demand?
a. Taking no action and leaving demand to find its own levels.
b. Reduce demand in peak periods.
c. Increase demand when there is excess capacity.
d. Inventory capacity until demand increases.
7. Marketing strategies can be used to shape demand in all ways EXCEPT
____________.
a. modify mode of delivery
b. use price and other cost to manage demand
c. change product elements
d. modify time and place of delivery
e. use promotion and education
8. All of the following are ways to make waits more bearable EXCEPT ____________.
a. encourage group waits
b. keep customers occupied while waiting
c. make customers feel comfortable during waits
d. let customers know how long they are expected to wait
9. Which of the following is NOT one of the alternative queuing configurations
discussed?
a. Single line/single servers at sequential stages
b. Multiple line to single servers (“snake”)
c. Parallel lines to multiple servers
d. Designated lines to designated servers
e. “Take a Number” (single or multiple servers)
Essentials of Services Marketing, 2nd Edition
Jochen Wirtz, Patrica Chew and Christopher Lovelock
10. Which of the following is NOT one of the benefits of having a reservations system?
a. Helps service personnel to serve more effectively.
b. Helps in pre-selling the service.
c. Helps customers to avoid queuing.
d. Helps firms to keep some time aside for emergency jobs.
e. Allows demand to be controlled.
True/False
11. The term “productive capacity” refers to the resources or assets that a firm can
employ to create goods and services.
12. Medical clinics, hotels, and passenger aircrafts are all examples of physical facilities
designed to contain goods and services.
13. Financial success in businesses with limited capacity depends largely on how
capacity is used.
14. Optimum and maximum capacities are never one and the same (e.g. a sport
performance).
15. One way to stretch capacity is to ensure slack time is encountered.
16. Demand patterns are usually random.
17. Good records of a firm’s transactions can help one to understand demand patterns.
18. When a firm wants to inventory demand via a reservation system and has insufficient
capacity it should lower prices selectively.
19. We need to have queuing or reservations systems because demand cannot be
Essentials of Services Marketing, 2nd Edition
Jochen Wirtz, Patrica Chew and Christopher Lovelock
20. Yield analysis forces managers to recognize the opportunity cost of selling capacity
for a given date to a customer from one market segment when another might
subsequently yield a higher rate.
Short Answer
21. What are the four supply and demand conditions that a fixed-capacity service may
face?
22. What are the two basic approaches to fluctuating demand?
23. List the six actions managers can take to adjust capacity as needed.
24. List the four key marketing strategies that can be employed to reshape demand.
25. What are thee strategies that can be employed when considering a modification to the
place and time of service delivery?
Test Bank ― Chapter 9 Page 5
Essentials of Services Marketing, 2nd Edition
Jochen Wirtz, Patrica Chew and Christopher Lovelock
Essay
26. Describe four of the ten propositions on the psychology of waiting lines.
27. Describe what the term “yield” means in the context of a reservation strategy.
APPLICATION CONTENT
Multiple Choice Questions
28. Mont Tremblant uses all the following ways to attract guests during summer
EXCEPT _____________.
a. water sports on the lake
b. face painting
c. balloon sculpting
d. wind surfing
e. roller-blading
29. The demand on a city bus is likely to vary by all EXCEPT which of the following?
a. Time of day.
b. Day of the week.
c. Season of the year.
d. Population density in the city.
e. All of the above will likely cause demand to vary on a city bus.
Essentials of Services Marketing, 2nd Edition
Jochen Wirtz, Patrica Chew and Christopher Lovelock
30. ____________ is usually the first variable to be proposed for bringing demand and
supply into balance.
a. Price.
b. Place.
c. Personnel.
d. Product.
31. One way for car washes to decrease the number of visitors to the existing site is to
a. Offer free pickup and delivery of cars to be washed.
b. Offer mobile car wash services.
c. Add more service options.
d. Increase prices to get the most out of current customers.
e. Educate customers on when they should have their cars washed.
32. New York City’s 911 service uses education to ______________.
a. attract new callers
b. show callers when peak periods are
c. discourage undesirable demand
d. channel calls to medical services
e. encourage callers to use their services
True/False
33. A subway can increase the capacity on a route after all seats have been occupied.
34. During the SARS period when travel and tourism was affected, staff were sent for
35. A good example of inventorying demand is a haircut that can be set up and prepared
for one day and executed the next.
36. One of the most direct ways for a hotel to reduce excess demand at peak periods is to
charge customers more money to use the service during those periods.
37. Airlines place restrictive conditions on fares for tourists to prevent business travelers
from traveling on economy class.
Test Bank ― Chapter 9 Page 7
Short Answer
38. Describe how optimum and maximum capacities may differ in the restaurant
industry.
39. Give a situation where optimal and maximum capacities are the same.
40. Discuss why a subway car has elastic capacity.
41. How did BMW occupy customers while they were waiting for their cars to be
serviced?
42. Which company is taking advantage of reservations system to do business?
PrimeTimeTables is an exclusive online company that helps customers to get table
Essay
43. Describe how ski resorts manage traditionally seasonal supply and demand
fluctuations.
Essentials of Services Marketing, 2nd Edition
Jochen Wirtz, Patrica Chew and Christopher Lovelock
44. Describe how Disney decided to deal with long lines.
45. Discuss how PrimeTimeTables can be successful in their business and the problems
they face in the provision of their service.