Strategic Management of Services
Exam Preparation Guide
Course Introduction
Strategic Management of Services explores the unique challenges and opportunities involved in designing, delivering, and sustaining service-based organizations in today's competitive marketplace. The course examines core concepts such as service operations, customer experience management, service quality, innovation, and the integration of technology within service firms. Students analyze strategic decision-making in various service industries such as hospitality, healthcare, finance, and retail using case studies and real-world examples to develop skills in strategy formulation, execution, and evaluation from a service-centric perspective. The goal is to enable students to think critically about service strategy to achieve differentiation, customer loyalty, and long-term organizational success.
Recommended Textbook
Service Management Operations Strategy Information Technology 9th Edition by
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16 Chapters
711 Verified Questions
711 Flashcards
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Page 2
Sanjeev Bordoloi
Chapter 1: The Service Economy
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50 Verified Questions
50 Flashcards
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Sample Questions
Q1) A study of service systems must begin with the fundamental idea that the basic inputs are supporting facility, facilitating goods, labor, and capital. The output is the service offered.
A)True
B)False Answer: False
Q2) Service-dominant logic is the foundation of "service science."
A)True
B)False
Answer: True
Q3) It is convenient and often necessary to combine the operations and marketing functions for service organizations.
A)True
B)False Answer: True
Q4) The consumer participates in the service process, which is not the case in manufacturing.
A)True
B)False Answer: True
Page 3
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Chapter 2: Service Strategy
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70 Verified Questions
70 Flashcards
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Sample Questions
Q1) Information is a substitute for inventory.
A)True
B)False
Answer: True
Q2) A cost-leadership strategy often involves customizing a standard service.
A)True
B)False Answer: False
Q3) Selling information and developing new services are examples of the role that information technology plays in generating revenue.
A)True
B)False Answer: False
Q4) On-line networks between suppliers and their customers create a barrier to entry.
A)True
B)False
Answer: True
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Page 4
Chapter 3: New Service Development
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48 Flashcards
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Sample Questions
Q1) Investment banking is a financial service that has high complexity and high divergence.
A)True
B)False
Answer: True
Q2) Blockchain is a trusted immutable digital ledger that deletes all but recent transactions.
A)True
B)False Answer: False
Q3) Radical service innovations are driven mostly by technological innovations.
A)True
B)False Answer: True
Q4) A factor that simplifies the design of service systems is the presence of the customer in the process.
A)True
B)False Answer: False
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Chapter 4: The Service Encounter
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Sample Questions
Q1) Acceptance of new technology by customers is hampered because a new script must be learned.
A)True
B)False
Q2) Which of the following firms has an encounter not dominated by the service organization?
A) Enterprise Rent-A-Car.
B) H & R Block.
C) McDonald's.
D) Jiffy Lube.
Q3) Self-service falls into the technology-________ service encounter category.
A) assisted
B) generated
C) facilitated
D) mediated
Q4) A "moment of truth" is not ________.
A) an opportunity to influence a customer's perception of the service quality
B) critical in achieving a reputation for superior quality
C) when the customer is forming an opinion about the efficiency of the service
D) an interaction between a customer and a service provider
Page 6
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Chapter 5: Supporting Facility and Process Flows
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Sample Questions
Q1) The advent of the "hub and spoke" airline network following deregulation is an example of ________.
A) nature and objectives of service organizations
B) flexibility
C) aesthetic factors
D) land availability and space requirements
Q2) All but one of the following impacts the user friendliness of the facility and the ability to serve customers effectively.
A) Floorplan.
B) Layout of equipment.
C) Equipment design.
D) Time of day.
Q3) A well-balanced line would have all jobs of nearly equal duration to avoid unnecessary idleness in work assignments.
A)True
B)False
Q4) Servicescapes are most important in their effect on customers.
A)True
B)False
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Chapter 6: Service Quality
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42 Verified Questions
42 Flashcards
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Sample Questions
Q1) Which of the following is not true of a Customer Satisfaction Survey?
A) Survey can be completed at customer convenience.
B) Survey usually is conducted by operations personnel.
C) Primary focus of survey is on overall impression of service.
D) Survey is designed around common service dimensions.
Q2) The first stage or rung of the service quality ladder is cost of quality.
A)True
B)False
Q3) Which of the following is not true of a walk-through audit (WtA)?
A) Focuses on five dimensions of service package.
B) Emphasis is on evaluation of each stage of service delivery.
C) Survey is completed at customer convenience.
D) Survey usually conducted by operations personnel.
Q4) Which of the following is not considered effective in achieving and maintaining service quality?
A) Encouraging service providers to be highly visible in dealing with customers.
B) Establishing peer groups among service providers to foster teamwork and a sense of pride.
C) Installing a system of incentives that emphasizes quality.
D) Increasing supervision of service providers.
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Chapter 7: Process Improvement
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27 Flashcards
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Sample Questions
Q1) Lean service is based upon the Toyota Production System.
A)True
B)False
Q2) Pareto chart is an arrangement of data where the causes of a problem are arranged in ascending frequency of occurrence in order to highlight the most likely cause.
A)True
B)False
Q3) The objective of lean service is a purposeful flow of satisfied customers.
A)True
B)False
Q4) Which one the following is not a guiding principle of lean philosophy?
A) Satisfy the needs of customers by doing only value-added activities.
B) Be flexible in response to customer demands.
C) Define the value stream by flowcharting the process.
D) Eliminate waste.
Q5) The Deming wheel is a repetitive cycle where quality improvements result from continuous incremental turns of the wheel.
A)True
B)False
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Chapter 8: Service Facility Location
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40 Flashcards
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Sample Questions
Q1) Which of the following items does the Huff retail location model not consider?
A) The degree of accessibility.
B) Travel time from the customer's location to the facility.
C) Facility size.
D) A parameter reflecting the importance of travel time by customers.
Q2) The Euclidian metric is used for locating a facility in an urban area.
A)True
B)False
Q3) The optimization criteria governing the location of a service facility is determined mainly by the ________.
A) ownership of the service, i.e., public or private
B) kind of service, e.g. food, banking, or postal
C) number of facilities to be located
D) average size of the facilities to be located
Q4) 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
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Chapter 9: Service Supply Relationships
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Sample Questions
Q1) ________ is not part of the service chain concept.
A) Conversion
B) Distribution
C) Inventory management
D) Knowledge management
Q2) Service tangibility increases as the focus of the service moves from property to people to process.
A)True
B)False
Q3) All but one of the following is a managerial implication of bidirectional relationships:
A) vendor selection based on reputation
B) service supply relationships are hubs
C) service capacity analogous to inventory
D) quality variation of customer inputs
Q4) Need identification is the first step in the outsourcing process model.
A)True
B)False
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Chapter 10: Globalization of Services
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Sample Questions
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) American Express, which offers financial and travel services on a global basis, is an example of a ________
A) focused service
B) focused network
C) clustered service
D) diversified network
Q3) Consumers develop expectations for a low divergent set of products and services from franchises.
A)True
B)False
Q4) Concentric diversification is a means of ensuring rapid market growth.
A)True
B)False
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Page 12
Chapter 11: Managing Capacity and Demand
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Sample Questions
Q1) The strategy of segmenting demand to reduce variation makes use of the fact that demand for a service seldom is derived from a homogeneous source.
A)True
B)False
Q2) Some restaurants use tables and chairs instead of booths to create more flexible capacity.
A)True
B)False
Q3) ________ is not a strategy for accommodating of customer-induced variability.
A) Provide generous staffing
B) Cross-train employees
C) Reward increased effort
D) Do work for customers
Q4) The strategy of segmenting demand is feasible only when ________.
A) demand is not from a homogeneous source
B) demand is cyclic and predictable
C) arrivals for service are random
D) making appointments is impossible
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Chapter 12: Managing Waiting Lines
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Sample Questions
Q1) The FCFS rule is most often used because ________.
A) analytical models depend upon its use
B) it represents social justice
C) it is viewed as fair
D) most other rules are not as easily applied
Q2) An arrangement of servers in parallel is an insurance against breakdowns of the service in case of absenteeism or equipment failure. It, thus, adds to flexibility at the expense of capacity utilization.
A)True
B)False
Q3) Which of the following techniques does not lessen the boredom of waiting customers?
A) Placement of mirrors in elevators.
B) Telling customers how long the wait is at different points in the queue.
C) Installing a television tuned to CNN.
D) Displaying time with a large analog clock.
Q4) The term interarrival time refers to the time elapsed between initiation of service and its completion.
A)True
B)False
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Chapter 13: Capacity Planning and Queuing Models
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Sample Questions
Q1) The cost of service capacity is determined by ________.
A) the number of customers waiting
B) the total number of customers
C) waiting time
D) the number of servers on duty
Q2) A queuing system is said to be in a transient condition when ________.
A) its parameters change with time
B) its parameters remain constant
C) it is still under the influence of the initial state
D) it grows beyond bound
Q3) In the M/M/1 model the calling population is finite.
A)True
B)False
Q4) Simulation allows time compression, doing in seconds what would otherwise require years of actual observation.
A)True
B)False
Q5) 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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Sample Questions
Q1) The forecast horizon for a cross-impact analysis method is medium-term.
A)True
B)False
Q2) Regression models require all of the following, except ________.
A) numerical data
B) subjective data
C) independent variables
D) dependent variable
Q3) Seasonal adjustment involves the deseasonalization of data in a given cycle after smoothing.
A)True
B)False
Q4) Both trend and seasonal adjustments can augment a single exponential-smoothing model.
A)True
B)False
Q5) The key feature of the historical analogy method is that it assumes some future event is related to the occurrence of an earlier event.
A)True
B)False
Page 16
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Chapter 15: Managing Service Inventory
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Sample Questions
Q1) Which one of the following is the most important for a continuous review system?
A) Constant lead time.
B) Fixed order quantity.
C) POS scanning.
D) Normal demand distribution.
Q2) For the planned shortage model, when the cost of backorders approaches zero, the order quantity becomes undefined.
A)True
B)False
Q3) Obsolescence is part of shortage costs.
A)True
B)False
Q4) Forward buying is used to avoid expensive interruptions of service, as a stock out at any stage of the physical goods distribution system would have far-reaching consequences for the other stages.
A)True
B)False
Q5) The strategy of maintaining a speculative inventory is known as forward hedging. A)True
B)False
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Chapter 16: Managing Service Projects
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Sample Questions
Q1) Implementing critical path analysis is faced with all of the following problems, except
A) availability of project management software
B) agreement on the project network
C) eliciting time estimates for activities
D) introduction of bias in activity time estimates
Q2) Which one of the following allows the manager to make probability statements with regard to meeting project objectives?
A) Gantt chart.
B) CPM.
C) PERT.
D) Earned-value chart.
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
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