Service Management
Midterm Exam
Course Introduction
Service Management explores the principles, strategies, and practices essential for delivering high-quality services in various industries. This course examines key concepts such as service design, service delivery, customer experience, and service operations. Students will analyze the unique challenges of managing services versus products, including the intangibility, perishability, and variability of service offerings. Through case studies and practical applications, learners will develop skills in service quality measurement, demand management, service process improvement, and relationship management. The course prepares students to effectively manage and innovate within service organizations to meet evolving customer expectations and achieve organizational goals.
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Sanjeev Bordoloi
Chapter 1: The Service Economy
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Q1) An empty airline seat or hotel room not occupied best illustrates the characteristic of a service's ________.
A) time perishability
B) labor intensity
C) intangibility
D) simultaneous production and consumption
Answer: A
Q2) Which of the following is not a principle on which service experience design is based?
A) Theme the experience.
B) Eliminate negative cues.
C) Mix in memorabilia.
D) Encourage customer feedback.
Answer: D
Q3) Value for the "business service experience" is derived from co-creation.
A)True
B)False
Answer: True
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Chapter 2: Service Strategy
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Q1) Service industries have low entry barriers because economy-of-scale opportunities are limited.
A)True
B)False
Answer: False
Q2) A difficult economic environment exists for service industries for all but one of the following reasons.
A) Relatively high overall entry barriers.
B) Product substitution.
C) Minimal opportunities for economies of scale.
D) Exit barriers.
Answer: A
Q3) Which of the following is not identified as a strategy common to many successful service providers?
A) Close coordination between the marketing and operations.
B) The exploitation of information to generate new business.
C) A project-oriented organizational structure.
D) Redirection of the strategic service vision inward to focus on employees.
Answer: C
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Page 4
Chapter 3: New Service Development
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Sample Questions
Q1) Which of the following is not an increase in service complexity?
A) A supermarket adds a florist shop.
B) A supper club opens for Sunday brunch.
C) A restaurant switches from "house salad" to a salad bar with 40 items.
D) A health spa hires a massage therapist.
Answer: B
Q2) Fast-food restaurants have adopted the production-line approach to service design.
A)True
B)False
Answer: True
Q3) ________ is not one of the categories of intellectual property.
A) A trademark
B) A trade secret
C) Industrial design
D) Process layout
Answer: D
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Chapter 4: The Service Encounter
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Q1) Flexibility in meeting customer needs is the main reason that some service firms have empowered contact personnel.
A)True
B)False
Q2) Jiffy Lube, a franchised oil change and lubrication service, is an example of a service encounter dominated by ________.
A) the organization
B) contact personnel
C) the customer
D) corporate culture
Q3) Empowerment begins with delegation.
A)True
B)False
Q4) Which of the following is the least likely source of difficulty with interactions between customers and contact personnel?
A) Poor employee selection and training.
B) Customers not understanding their role in the process.
C) Customers having no money to pay the bill.
D) Unrealistic customer expectations.
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Chapter 5: Supporting Facility and Process Flows
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Q1) Heuristic algorithms are not only appealing intuitively, but they also guarantee optimal solutions.
A)True
B)False
Q2) Which among the following choices might not be representative of security measures taken by retail stores?
A) Reducing the number of extremely valuable items sold.
B) A row of bollards outside the entrance.
C) Doing away with big windows.
D) None of the above.
Q3) The inability of a jewelry store to expand its current operations to include, for example, an in-store repair and manufacturing facility in response to customer demands, is neglecting which factor of service facility design?
A) Land availability and space requirements.
B) Flexibility.
C) The nature and objectives of the service organization.
D) Community and environment.
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Chapter 6: Service Quality
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Q1) Which of the following is not possible using SERVQUAL?
A) Record customer expectations.
B) Track service quality trends.
C) Measure the quality of competitors.
D) Identify dimensions of service quality.
Q2) According to the SERVQUAL quality assessment instrument, responsiveness is the most important dimension of service quality.
A)True
B)False
Q3) When customer expectations are confirmed by perceptions, service quality is considered satisfactory.
A)True
B)False
Q4) Which one of the following is not an approach to service recovery?
A) Case-by-case.
B) Systematic-response.
C) Unconditional guarantee.
D) Early intervention.
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Chapter 7: Process Improvement
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Q1) Continuous improvement is a valuable concept, but it lacks measurement techniques.
A)True
B)False
Q2) Data Envelopment Analysis (DEA), when used repeatedly, can facilitate the competitive strategy of cost leadership.
A)True
B)False
Q3) Which pair of parameters describes the "candidates for divestiture" quadrant in the DEA strategic matrix?
A) Low efficiency and low profit.
B) Low efficiency and high profit.
C) High efficiency and high profit.
D) High efficiency and low profit.
Q4) The fishbone chart offers a structured approach for a team to identify, explore, and display graphically all of the possible causes of a problem.
A)True
B)False
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Chapter 8: Service Facility Location
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Q1) ArcGIS, a GIS for business applications, finds applications in all but one of the following: ________.
A) mapping customer databases
B) determining site locations
C) forecasting demand
D) improving delivery service
Q2) The success of L.L. Bean questioned the necessity of always finding a location that is convenient for customers' physical access.
A)True
B)False
Q3) When a customer travels to the service facility, the direct cost that is incurred is the decrease in potential customer demand that occurs as a result of the distance traveled.
A)True
B)False
Q4) The advantage of substituting communication for travel becomes possible when face-to-face interaction between server and customer is not necessary.
A)True
B)False
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Chapter 9: Service Supply Relationships
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Q1) All but one of the following depicts the impact of service chain management:
A) proactive demand management
B) variable pricing
C) real-time tracking
D) pull system for flow of information
Q2) Product postponement is the strategy of stocking a product in generic form for later customization.
A)True
B)False
Q3) In the physical goods supply chain, information moves to the left and material to the right.
A)True
B)False
Q4) The link between payment histories and risky driving behavior is used to price insurance policies.
A)True
B)False
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Page 11
Chapter 10: Globalization of Services
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Q1) When franchising, which of the following is not an issue for the franchisee?
A) Establishing a brand.
B) Franchise contract.
C) Degree of discretion
D) Conflict resolution.
Q2) When a firm offers multiple services at a single location, it is using a clustered service strategy.
A)True
B)False
Q3) A family restaurant is an example of a focused service.
A)True
B)False
Q4) Mayo Clinic is a service firm that would fall under which of the following categories?
A) Single location and single service.
B) Single location and multiservice.
C) Multisite and single service.
D) Multisite and multiservice.
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Chapter 11: Managing Capacity and Demand
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Q1) Overbooking is a strategy that can be used to smooth demand.
A)True
B)False
Q2) The use of a ski-resort hotel for business conventions during the summer is an example of using the complementary service strategy.
A)True
B)False
Q3) A drawback to increased consumer participation is the fact that service quality is no longer completely under the control of the provider of the service.
A)True
B)False
Q4) ________ variability is not one of the five sources of customer-induced variability.
A) Arrival
B) Capability
C) Effort
D) Demand
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Chapter 12: Managing Waiting Lines
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Q1) Supermarkets can be described by which of the following facility arrangement?
A) Self-serve followed by service in parallel.
B) Many service centers in parallel and series.
C) Servers in parallel.
D) Self-service.
Q2) After selecting a line in a multiple queue system, a customer is ________ when she or he switches to a different line that is perceived to be moving faster.
A) jockeying
B) balking
C) reneging
D) weaving
Q3) According to Maister, which of the following statements is not true for waits?
A) Unoccupied time feels longer than occupied time.
B) Anxiety makes waits feel longer.
C) In-process waits feel longer than preprocess waits.
D) Unfair waits feel longer than fair waits.
Q4) Multiple queue configuration may deter balking behavior.
A)True
B)False
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Chapter 13: Capacity Planning and Queuing Models
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Q1) The A/B/C notation classifies queuing systems on the basis of ________.
A) arrival rates and queue discipline
B) queue discipline alone
C) arrival rates and service rates
D) arrival rates, service rates, and number of servers
Q2) A system is said to be in a transient state when the values of its governing parameters in this state are expected to change uncontrollably with time.
A)True
B)False
Q3) Which of the following is not an advantage of using one large computer system to serve an entire university community?
A) Short turnaround time.
B) Large memory.
C) Economics of scale in services.
D) Short wait in queue.
Q4) Simulation can be viewed as a laboratory for experimenting with service systems.
A)True
B)False
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Chapter 14: Forecasting Demand for Services
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Q1) The greatest advantage of subjective techniques like Delphi method and cross-impact analysis, is that the methods are fairly standardized and do not require much expertise in actual use.
A)True
B)False
Q2) All of the following are forecasting models, except ________ model.
A) subjective
B) objective
C) causal
D) time series
Q3) Costs for preparing time series forecasts generally are lower than for other models.
A)True
B)False
Q4) All of the following are characteristics of the moving-average model, except
A) very low relative cost
B) short-term forecast horizon
C) uses all past data in forecast
D) used for demand forecasting
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Chapter 15: Managing Service Inventory
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Q1) Patients waiting for heart transplants are an example of an inventory model that has a backorder cost of zero.
A)True B)False
Q2) For the planned shortage model, when the cost of backorders approaches zero, the order quantity becomes undefined.
A)True B)False
Q3) When a quantity discount is offered, the first step should be to compute ________.
A) EOQ for the highest price per unit
B) EOQ for the lowest price per unit
C) the total annual cost for the highest quantity discount
D) the total annual cost for the lowest quantity discount
Q4) Equating the annual holding and ordering costs can be used to derive the EOQ formula.
A)True B)False
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Chapter 16: Managing Service Projects
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Q1) Schedule variance is the difference between budgeted cost for work performed and actual cost of work performed.
A)True
B)False
Q2) A major weakness with project completion time analysis with uncertain activity times is the ________.
A) possibility that more than one critical path might exist
B) need to solicit three time estimates for each activity
C) assumption that the project completion time is normally distributed
D) bias associated with the expected project completion time
Q3) The amount of time an activity can be delayed without delaying the completion of the project is referred to as ________.
A) total slack
B) late finish
C) late start
D) free slack
Q4) Total slack for an activity can be shared with following activities.
A)True
B)False
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