CAPACITY AND DEMAND MANAGEMENT
Capacity can be defined as ‘the maximum level of value added activity over a period of time that the service process can achieve under normal operating conditions’. (Johnston and Clark, 2001) The essential task of capacity management is to look at the current performance of a service identify any bottle necks, understand the workload places on it and the underlying business drivers that may affects future traffic. The next task is to access the workload growth history and define potential future scenario, then to map that workload demand on the existing resources configuration, to access likely future performance.(Adam Grummitt, 2009)
If a room or a cover is not sold on a given day, the revenue for that room/ cover is lost forever. The same as, a cover lost today cannot be generated tomorrow. Hence, the challenge for the restaurant becomes to maximize revenue by managing capacity appropriately. Controlling capacity is a must to perform. (Shoemaker et al, 2007) Following are the Capacity strategies as suggested by Johnston and Clark (2001):
Level Capacity Strategy: In this strategy, an organization needs to compromise with the quality of service in order to achieve maximum utilization of expensive resources (Johnston and Clark 2001). Such a strategy would not be recommended for the creative kitchen as it is a fine dining restaurant. Chase Strategy: this strategy is adopted by high volume customer services, where they provide rapid access to services as a part of their competitive strategy. (Johnston and Clark 2001) Demand Management Strategies: Rather than changing the capacity of service operation, the organization tries to influence the customer demands and maximize sales during off-peak periods. (Johnston and Clark 2001) This strategy would be recommended to the creative kitchen Restaurant because, presently, they do not offer discounts of any kinds such as happy hours in the bar etc. In order to implement this...
Bibliography: • Johnston, R. and Clark, G. (2001) Service Operation Management, Harlow, Financial Times.
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