Service Systems Engineering and Management

618 Pages·2018·20.4 MB·English

by  Griffin, Paul M., Prabhu, Vittaldas V., Ravindran, A. Ravi

Service Systems
Engineering and
Management
The Operations Research Series
Series Editor: A. Ravi Ravindran
Professor Emeritus, Department of Industrial and Manufacturing Engineering
The Pennsylvania State University – University Park, PA
Published Titles:
Service Systems Engineering and Management
A. Ravi Ravindran, Paul M. Griffin, and Vittaldas V. Prabhu
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Michael W. Carter & Camille C. Price
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Probability Models in Operations Research
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Service Systems
Engineering and
Management
A. Ravi Ravindran
Paul M. Griffin
Vittaldas V. Prabhu
CRC Press
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Contents
List of Figures ......................................................................................................xix
List of Tables .......................................................................................................xxv
Preface .................................................................................................................xxxi
Acknowledgments .........................................................................................xxxvii
Authors .............................................................................................................xxxix
1 Service Systems: An Overview ....................................................................1
1.1 Goods and Services ..............................................................................1
1.2 Differences between Goods and Services .........................................2
1.2.1 Intangibility ..............................................................................2
1.2.2 Perishability ..............................................................................2
1.2.3 Proximity...................................................................................3
1.2.4 Simultaneity ..............................................................................3
1.3 Challenges Posed by Services .............................................................3
1.3.1 Impact of Technology ..............................................................3
1.3.2 Bundled Products ....................................................................4
1.3.3 Self-Service ................................................................................4
1.3.4 Service Quality .........................................................................4
1.3.5 Managing Capacity and Demand .........................................4
1.4 Classification of Services ......................................................................5
1.4.1 Service Industries ....................................................................5
1.4.1.1 Communications ......................................................5
1.4.1.2 Education ...................................................................6
1.4.1.3 Entertainment ...........................................................6
1.4.1.4 Financial Services .....................................................6
1.4.1.5 Government Services ...............................................7
1.4.1.6 Healthcare .................................................................7
1.4.1.7 Hospitality and Leisure ...........................................7
1.4.1.8 Insurance ...................................................................8
1.4.1.9 Professional Services ...............................................8
1.4.1.10 Retail and Wholesale ...............................................8
1.4.1.11 Transportation ..........................................................9
1.4.1.12 Utilities .......................................................................9
1.4.2 Ancillary and Support Services .............................................9
1.4.3 Service Process Matrix ..........................................................10
1.4.3.1 Service Factory ........................................................11
1.4.3.2 Service Shop ............................................................11
1.4.3.3 Mass Service ............................................................11
1.4.3.4 Professional Service ...............................................12
1.4.3.5 Use of Service Process Matrix ..............................12
vii
viii Contents
1.5 Role of Services in the Economy .......................................................12
1.5.1 U.S. Employment by Sector ..................................................13
1.5.2 U.S. GDP by Sector .................................................................13
1.6 Strength of American Manufacturing .............................................14
1.6.1 Decline in U.S. Manufacturing ............................................14
1.6.2 Revival of U.S. Manufacturing.............................................15
1.7 What Is Service Systems Engineering? ............................................16
1.7.1 Engineering Issues in Service Systems ...............................16
1.7.2 Engineering Problems in Services.......................................16
1.7.3 Multiple-Criteria Decision Making in Services .................17
1.8 Quality of Service ................................................................................19
1.8.1 QoS Measures .........................................................................19
1.8.2 Dimensions of Service Quality ............................................20
1.9 Methods for Measuring Service Quality .........................................21
1.9.1 SERVQUAL .............................................................................21
1.9.2 Statistical Process Control ....................................................24
1.9.2.1 Variable Control Charts .........................................24
1.9.2.2 Attribute Control Charts .......................................28
1.9.2.3 Selecting the Sample Size for Control Charts ....30
1.9.3 Other Service Quality Tools .................................................31
1.9.3.1 Run Chart ................................................................32
1.9.3.2 Histogram ................................................................33
1.9.3.3 Pareto Chart ............................................................34
1.9.3.4 Scatterplot ................................................................34
1.9.3.5 Flowchart .................................................................35
1.9.3.6 Fishbone Diagram ..................................................36
1.10 Summary ..............................................................................................38
Exercises ..........................................................................................................39
References .......................................................................................................42
2 Forecasting Demand for Services..............................................................45
2.1 Role of Demand Forecasting in Services .........................................45
2.2 Forecasting Process .............................................................................46
2.3 Qualitative Forecasting Methods .....................................................47
2.3.1 Executive Committee Consensus ........................................47
2.3.2 Delphi Method .......................................................................48
2.3.3 Survey of Sales Force .............................................................49
2.3.4 Customer Surveys ..................................................................49
2.4 Quantitative Forecasting Methods ...................................................49
2.4.1 Time Series Forecasting ........................................................49
2.4.2 Constant Level Forecasting Methods .................................51
2.4.3 Last Value Method .................................................................52
2.4.4 Averaging Method .................................................................52
2.4.5 Simple Moving Average Method .........................................53
2.4.6 Weighted Moving Average Method ....................................53
Contents ix
2.4.7 Computing Optimal Weights by Linear
Programming Model .............................................................54
2.4.8 Exponential Smoothing Method .........................................56
2.4.8.1 Choice of Smoothing Constant (α) .......................57
2.5 Incorporating Seasonality in Forecasting .......................................58
2.6 Incorporating Trend in Forecasting .................................................62
2.6.1 Simple Linear Trend Model ..................................................62
2.6.2 Holt’s Method .........................................................................64
2.7 Incorporating Seasonality and Trend in Forecasting ....................66
2.7.1 Method Using Static Seasonality Indices ...........................66
2.7.2 Winters Method .....................................................................67
2.8 Forecasting for Multiple Periods .......................................................70
2.8.1 Multi-Period Forecasting Problem ......................................70
2.8.2 Multi-Period Forecasting under Constant Level ...............71
2.8.3 Multi-Period Forecasting with Seasonality ........................71
2.8.4 Multi-Period Forecasting with Trend..................................72
2.8.5 Multi-Period Forecasting with Seasonality and Trend ....72
2.9 Forecasting Errors ...............................................................................73
2.9.1 Uses of Forecast Errors ..........................................................76
2.9.2 Selecting the Best Forecasting Method ...............................76
2.10 Monitoring Forecast Accuracy ..........................................................77
2.10.1 Tracking Signal .......................................................................77
2.11 Forecasting Software ..........................................................................79
2.11.1 Types of Forecasting Software .............................................79
2.11.1.1 Automatic Software ...............................................79
2.11.1.2 Semi-Automatic Software .....................................79
2.11.1.3 Manual Software ....................................................80
2.11.2 User Experience with Forecasting Software ......................81
2.12 Forecasting in Practice .......................................................................81
2.12.1 Real-World Applications .......................................................81
2.12.2 Forecasting in Practice: Survey Results ..............................82
2.13 Summary and Further Readings ......................................................83
2.13.1 Demand Forecasting—Summary ........................................83
2.13.2 ARIMA Method .....................................................................84
2.13.3 Croston’s Method ...................................................................84
2.13.4 Further Readings in Forecasting .........................................85
Exercises ..........................................................................................................85
References .......................................................................................................90
3 Design of Service Systems ..........................................................................93
3.1 Modeling with Binary Variables .......................................................93
3.1.1 Capital Budgeting Problem ..................................................93
3.1.2 Fixed Charge Problem ...........................................................96
3.1.3 Constraint with Multiple Right-Hand-Side (RHS)
Constants .................................................................................97