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Multiple Choice Quiz
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1
Managing capacity and demand is important because service capacity is perishable.
A)True
B)False
2
Smoothing demand involves improving forecasting techniques.
A)True
B)False
3
The use of major sports stadiums for monster truck shows or county fairs is an example of partitioning demand.
A)True
B)False
4
Strategies for managing customer-induced variability fall into two categories: accommodation and reduction.
A)True
B)False
5
Yield management is a combination of several demand manipulation strategies, such as reservations, demand partitioning, and overbooking.
A)True
B)False
6
A service with a cost of overestimating demand of $10 and a cost of underestimating demand of $7 would have a critical fractile of 0.7.
A)True
B)False
7
Which of the following is not a way by which services can manipulate demand to match capacity?
A)Segmenting customers into distinct groups with different needs, and letting (or forcing) these groups use the service at different times.
B)Offering price incentives at off-peak times.
C)Using reservation systems.
D)Using part-time help.
8
Which of the following is not a way by which services can manipulate capacity to match demand?
A)Cross training employees to perform different tasks.
B)Adding complementary services (i.e. a bookstore that opens an espresso bar)
C)Increasing customer participation in the service
D)Sharing resource with competitors.
9
For the overbooking strategy, why is the optimal number of units (i.e. airline seats, hotel rooms) overbooked not equal to the expected number of no-shows?
A)Variability in the number of no-shows makes the number difficult to calculate.
B)The costs associated with overbooking and under-booking are not equal.
C)It is illegal to excessively overbook.
D)Hotels and airlines reserve some spots for important or emergency situations.
10
Even after shift scheduling, services still find themselves overstaffed at times because
A)costs are determined in dollars, not hours.
B)employees are not working 100% of the time.
C)demand is variable, while shifts are rigid.
D)capacity and demand are not directly related.
11
Which of the following is not a characteristic of a service for which yield management is appropriate?
A)Ability to segment markets.
B)Ability to sell services in advance.
C)Low marginal sales costs and high marginal capacity change costs.
D)Underdeveloped information systems.
12
Which of the following is not true for the linear programming formulation of the weekly workshift scheduling with days-off constraint?
A)The number of variables equals the number of constraints.
B)The problem is solved for integer results.
C)Only one optimum solution results.
D)The diagonal for the constraints contains zeros.





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