Demand/supply disequilibrium management.
Demand/supply disequilibrium management refers to the management of fluctuating, but otherwise normal and expected demand (in terms of average demand and supply), a condition that Kotler (1973) referred to as irregular demand.This article analyzes management response to short-run fluctuations in demand and supply (i.e. fluctuations that occur on a daily, weekly, or seasonal basis). Long-run disequilibrium responses owing to the lack of viability of the product in a dynamic marketplace or owing to macro issues such as the business cycle, strikes, or embargoes are outside the parameters of this discussion. For the sake of brevity, we term the management of supply/demand imbalances associated with irregular demand, disequilibrium management.The rest of the article is organized in four sections. The next section is a background section that sets the contextual framework for the rest of the article. Then, a short section on direct disequilibrium management strategies is provided. The main body of the article deals with two additional categories of disequilibrium management strategies: 1 intelligence enhancement strategies that arm service enterprise managers with the information they need to make the marketing and managerial move
Similarly, the firm may offer altogether different types of services in the off-season, installing computerized book-keeping systems for small businesses, for example. The service establishment saves on advertising, screening, and bookkeeping costs to offset the wage premium paid to the agency. Thus, firms shift risks associated with fluctuations in demand to employees. In terms of the conceptual model in Figure 1, demand management strategies and supply management strategies decrease the losses which occur during demand/supply imbalances. Risk Reduction StrategiesEveryone has, at one time or another, walked into a service or retail establishment with a multitude of salespersons or other customer encounter personnel and no other customers besides yourself (slack demand/over supply). Letting accountants determine the level of promotional expenditures, however, may lead to sub-optimal results. Long distance phone companies have used this strategy successfully for years. Managers may use differential scheduling systems to lower staffing levels to match demand. Just as the first strategy for obtaining intelligence about demand trends is more a matter of "willingness to do it" rather than how to do it, the second suggested strategy is very simple, but often overlooked. Cross-training employees may be more expensive than using a specialization approach, though it should pay off in the long run. Finally, risk reduction strategies diminish exposure to the negative consequences of disequilibrium situations. Cross-training not only improves short-term flexibility and lessens exposure to losses associated with demand/supply imbalances, but also heightens employee morale, thus improving service quality. As illustrated in Figure 1, these strategies generally fall into two categories: 1 input scheduling strategies (change supply to fit demand); and 2 marketing mix strategies (change demand to fit supply). On the other hand, the same hospital may limit admittances during a period of excess demand - resulting in a loss of potential revenues.
Common topics in this essay:
Indeed Mabert,
Table II,
Background Marketers,
Haltiwanger Maccini,
Trade Association,
Quatro Pro,
,
April Similarly,
Bell Wendy's,
Enhancement Strategies,
management strategies,
disequilibrium situations,
service enterprises,
disequilibrium management,
demand supply,
demand/supply imbalances,
demand trends,
supply management strategies,
supply management,
disequilibrium management strategies,
fluctuations demand,
demand slack,
risk reduction strategies,
unforeseen disequilibrium situations,
et al 1985,
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