“Service capacity is more time- and location- dependent, it is subject to more volatile demand fluctuations, and utilization directly impacts service quality”

“Service capacity is more time- and location- dependent, it is subject to more volatile demand fluctuations, and utilization directly impacts service quality” (Jacobs & Chase, 2020).

Time- Services cannot be used at a later or future time. Whereas good from manufacturing can be stored.

Location- The service must be at the location of the customer, there must be some type of interaction for the service to exist. Even using a telephone or computer the customer and the service must be connected for the service to take place. During manufacturing the good is made then distributed through a supply chain to the customer.

Short Summary of News Article

This article was written about the rising unemployment rate due to COVID and the industries that have been most severely impacted. Many states have identified service industry as their main source of layoffs. “Nearly ten million people applied for unemployment in the last two weeks of march” (IW Staff, 2020). The article goes on to explain what the government plans to do about the crisis and describes the industries that have been hit hardest with layoffs.

Analyze Based Upon the Management Concept

Due to the service industry needing time and a location with the customer COVID has ravaged the service industry. The capacity utilization rate and service rate during the pandemic was at 0 due to customers not being able to enter establishments. Manufacturing plants were able use frequency of capacity reductions and become flexible plants moving schedules around, changing locations of the machines, and consistent sanitization most did not fully stop working they just worked at a limited capacity. These factories were able to stay in service but still anticipate their demand to rise or fall depending on the industry. The service industry was not able to do this due to the nature of their jobs from sports facilities, retail, hospitality and travel. On the other hand, places like hospitals and the healthcare industry which is a service was able to adapt when they had aimed for low utilization rates but were able to perform when they were over 100 percent capacity.

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