rovider - and they may end up liking the second service provider more. What a tragedy for the old service provider.
             Thus, an inability to synchronize supply and demand impacts the bottom line through lost opportunity when demand is greater than the firm's capacity to satisfy demand and through high costs when demand is insufficient and fixed capacity is wastefully under-utilized. An unused hospital bed, for instance, represents an irretrievable loss to the hospital. On the other hand, the same hospital may limit admittances during a period of excess demand - resulting in a loss of potential revenues. The same is true for the hospitality industry. A service enterprise may use salaried employees as its key input in rendering the product unto the consumer. When demand is slack - a dearth of customers - the enterprise must nevertheless pay the employees. When demand is over-full - more customers than capacity - the service organization cannot accommodate all of its customers. Revenue loss or worse, dissatisfied customers, result. For other service firms, tax accounting for example, demand is extremely seasonal. Help is difficult to find during the "in" season, and profitable alternatives are difficult to find during slow periods. The data from at least one empirical study suggest that service firm managers perceive demand fluctuations as their biggest managerial headache (Zeithaml et al., 1985).
             Figure 1 depicts a conceptual model of how service enterprises can use disequilibrium management strategies to improve performance. As described above, unattended demand/supply imbalances cause losses that negatively impact performance. Four categories of strategies are shown in Figure 1. Demand management strategies seek to lessen the amount of losses by altering demand to fit supply constraints. Supply management strategies attempt to change supply capacities to fit demand. Intelligence enhancement increases the effectiveness of demand and sup...