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Personnel office of a firm: The primary customer is the firm itself; including managers and staff in various
departments who require the services of the personnel office.
3. a. Vending machine business: Provider routed with a limited number of process pathways and
standardized service.
b. Housecleaning service: Customer routed with many process pathways and highly customized
c. Appliance repair: Provider routed with a limited number of process pathways and standardized
service (highly repeatable)
Work force management differs in the three types of businesses: the vending machine business and the
housecleaning service would employ less skilled workers than the appliance repair business.
Capacity planning would be important in the vending machine business because decisions must be made
regarding the number and size of machines per location. Capacity decisions for the housecleaning service
has centralized inventory while the vending machine business has inventory at dispersed locations also. A
housecleaning service would not be very concerned with inventory.
Vending machines are concerned with the quality of the merchandise sold, which can be controlled by
purchasing quality products and by careful inventory management. Quality in a housecleaning service is a
5. a. Hospital: Physical items and facilitating goods include buildings, beds, medical equipment, drugs,
and supplies. The tangible benefits or explicit services include treatment such as surgery,
lawsuits, defense at trial, advice, negotiation, and administration of legal documents and
procedures. The psychological benefits include the knowledge that an expert is serving as an
advocate for your interests, and is handling the legal system in such a manner that your stake is
protected to the extent possible.
inefficiency into the service delivery system. Thus, the design of a service delivery system should focus on
separating those parts that involve customer contact from those that do not.
Customer contact does not always result in uncertainty or the necessity for customization, however.
McDonald's, for example, would be considered an extremely efficient service delivery system that also
Thus a critique of the customer contact model might be that it is not the amount of customer contact that
decreases the efficiency of a service delivery system, but the amount of uncertainty that the customer is
permitted to introduce to the service delivery system that lowers efficiency.
b. Trucking firm: FRONT ROOM SERVICES include selling the trucking firm's services, picking
up and delivering the goods, and interaction regarding the firm's charges to customers. BACK
ROOM SERVICES include maintaining the trucks in good repair, purchasing trucks, real estate,
and other necessary facilitating goods and services, and scheduling and dispatching of trucks.
personnel decisions, scheduling, deciding which products are allotted shelf space, purchasing, and
maintenance.
d. Appliance repair firm: FRONT ROOM SERVICES include dispatching and actual repair
services, in the case of service at the customer's site, and front desk staff, where appliances are
dropped off at the repair firm's location. BACK ROOM SERVICES include billing, admin-
istration (personnel, general management, inventory control, and purchasing among others), and
improved by increasing customer input and interaction so that customers perceive a high service level.
Conversely, back room services are improved by removing customer contact or uncertainty to improve
efficiency. Separating high and low contact service helps each operation focus on its primary task, service
or efficiency.
courtesy and helpfulness of employees or by making certain that correspondence is tactful and courteous.
BACK ROOM SERVICES might be improved by routing all last minute changes through management.
For a grocery store, FRONT ROOM SERVICES might be improved by carefully monitoring the length of
check out lines and calling extra checkers when needed. BACK ROOM SERVICES might be improved by
8. Service Guarantee for
a. Registration of college classes - A student can cancel a class within the first 2 weeks of classes
purchase if the buyer is not satisfied with how the car functions.
8.
9. An example of the service-profit chain for the movie business may simply be explained by satisfied
customers frequently going to movie theaters. If the admission price to a movie is say $10 and a typical
person goes to a movie theater once per month, which generates $120 annual revenue. This revenue is
Internal Service Quality – the layout of the facility, how jobs are designed, the extent to which emphasis is
given to rewarding the employees, development of new tools for serving the customers (e.g., the movie
video and audio technology).
Employee Satisfaction - the results from a survey of employees
Customer Satisfaction - the results of customer satisfaction surveys
Customer Loyalty - percentage of customers that returned to the movies within a year
matters that really affect service profitability. It emphasizes the importance of linking factors such as front-
line employees, technology and training that support the employees, and customer satisfaction. All the
links must be strong and should be measured and evaluated to determine ways to increase profit.
11. Examples will vary depending on specific sources used. Two examples are: (1) your money back if the
12. To be effective for the organization the service guarantee should be measurable, believable, and with few
conditions. Measurable means that the outcome of the service should have some quantitative or qualitative
measures. Believable means that the service guarantee should provide reasonable assurances. Fewer
conditions in the service guarantee will make it more useful to customers.
13. Pro’s of a service guarantee – improves quality of service, improves customer relations and customer
loyalty, and improves the brand name of the organization.
another. And, it defines the key tasks of operations for each of the cells in the matrix.
15. When a service firm outsources some of its services, another organization outside of the service firm now
performs service activities such as workforce recruiting, payroll management, accounting services, and call
center functions.
as radiologists. Assure that those hours worked by the offshore site are conducive to operations with those
in the United States. Attend to any legal issues and compensation issues associated with offshoring the
services in another country. Assure that both countries have the level of information technology needed for
the product or service.
and the host country to assure quality review of legal documents. Assure legal requirements are met both
within the offshore country and the host country as far as the services being offered.
d. Tax preparation: Assure tax preparation staff is fully trained in the preparation of returns for the host
country customers. Assure all laws regarding tax preparation are abided by in both countries. Assure
Personnel office of a firm: The primary customer is the firm itself; including managers and staff in various
departments who require the services of the personnel office.
3. a. Vending machine business: Provider routed with a limited number of process pathways and
standardized service.
b. Housecleaning service: Customer routed with many process pathways and highly customized
c. Appliance repair: Provider routed with a limited number of process pathways and standardized
service (highly repeatable)
Work force management differs in the three types of businesses: the vending machine business and the
housecleaning service would employ less skilled workers than the appliance repair business.
Capacity planning would be important in the vending machine business because decisions must be made
regarding the number and size of machines per location. Capacity decisions for the housecleaning service
has centralized inventory while the vending machine business has inventory at dispersed locations also. A
housecleaning service would not be very concerned with inventory.
Vending machines are concerned with the quality of the merchandise sold, which can be controlled by
purchasing quality products and by careful inventory management. Quality in a housecleaning service is a
5. a. Hospital: Physical items and facilitating goods include buildings, beds, medical equipment, drugs,
and supplies. The tangible benefits or explicit services include treatment such as surgery,
lawsuits, defense at trial, advice, negotiation, and administration of legal documents and
procedures. The psychological benefits include the knowledge that an expert is serving as an
advocate for your interests, and is handling the legal system in such a manner that your stake is
protected to the extent possible.
inefficiency into the service delivery system. Thus, the design of a service delivery system should focus on
separating those parts that involve customer contact from those that do not.
Customer contact does not always result in uncertainty or the necessity for customization, however.
McDonald's, for example, would be considered an extremely efficient service delivery system that also
Thus a critique of the customer contact model might be that it is not the amount of customer contact that
decreases the efficiency of a service delivery system, but the amount of uncertainty that the customer is
permitted to introduce to the service delivery system that lowers efficiency.
b. Trucking firm: FRONT ROOM SERVICES include selling the trucking firm's services, picking
up and delivering the goods, and interaction regarding the firm's charges to customers. BACK
ROOM SERVICES include maintaining the trucks in good repair, purchasing trucks, real estate,
and other necessary facilitating goods and services, and scheduling and dispatching of trucks.
personnel decisions, scheduling, deciding which products are allotted shelf space, purchasing, and
maintenance.
d. Appliance repair firm: FRONT ROOM SERVICES include dispatching and actual repair
services, in the case of service at the customer's site, and front desk staff, where appliances are
dropped off at the repair firm's location. BACK ROOM SERVICES include billing, admin-
istration (personnel, general management, inventory control, and purchasing among others), and
improved by increasing customer input and interaction so that customers perceive a high service level.
Conversely, back room services are improved by removing customer contact or uncertainty to improve
efficiency. Separating high and low contact service helps each operation focus on its primary task, service
or efficiency.
courtesy and helpfulness of employees or by making certain that correspondence is tactful and courteous.
BACK ROOM SERVICES might be improved by routing all last minute changes through management.
For a grocery store, FRONT ROOM SERVICES might be improved by carefully monitoring the length of
check out lines and calling extra checkers when needed. BACK ROOM SERVICES might be improved by
8. Service Guarantee for
a. Registration of college classes - A student can cancel a class within the first 2 weeks of classes
purchase if the buyer is not satisfied with how the car functions.
8.
9. An example of the service-profit chain for the movie business may simply be explained by satisfied
customers frequently going to movie theaters. If the admission price to a movie is say $10 and a typical
person goes to a movie theater once per month, which generates $120 annual revenue. This revenue is
Internal Service Quality – the layout of the facility, how jobs are designed, the extent to which emphasis is
given to rewarding the employees, development of new tools for serving the customers (e.g., the movie
video and audio technology).
Employee Satisfaction - the results from a survey of employees
Customer Satisfaction - the results of customer satisfaction surveys
Customer Loyalty - percentage of customers that returned to the movies within a year
matters that really affect service profitability. It emphasizes the importance of linking factors such as front-
line employees, technology and training that support the employees, and customer satisfaction. All the
links must be strong and should be measured and evaluated to determine ways to increase profit.
11. Examples will vary depending on specific sources used. Two examples are: (1) your money back if the
12. To be effective for the organization the service guarantee should be measurable, believable, and with few
conditions. Measurable means that the outcome of the service should have some quantitative or qualitative
measures. Believable means that the service guarantee should provide reasonable assurances. Fewer
conditions in the service guarantee will make it more useful to customers.
13. Pro’s of a service guarantee – improves quality of service, improves customer relations and customer
loyalty, and improves the brand name of the organization.
another. And, it defines the key tasks of operations for each of the cells in the matrix.
15. When a service firm outsources some of its services, another organization outside of the service firm now
performs service activities such as workforce recruiting, payroll management, accounting services, and call
center functions.
as radiologists. Assure that those hours worked by the offshore site are conducive to operations with those
in the United States. Attend to any legal issues and compensation issues associated with offshoring the
services in another country. Assure that both countries have the level of information technology needed for
the product or service.
and the host country to assure quality review of legal documents. Assure legal requirements are met both
within the offshore country and the host country as far as the services being offered.
d. Tax preparation: Assure tax preparation staff is fully trained in the preparation of returns for the host
country customers. Assure all laws regarding tax preparation are abided by in both countries. Assure
