April 05, 2009

Operations Management Lesson 6 Exercise

Level capacity

As an example of level capacity I would like to look at the Indoor Skiing centre. Next to my house I have a Gym, or let's say sports club. It consists of many sections like: Gym, Swimming pool, Sauna, Indoor Skiing centre etc. When developer constructed this centre he created the capacity of the slope. It is 50m wide, 600m long and has difference in height of 80m. Number of air conditioning systems keeps the inside temperature of -5°C. This level of capacity can not be changed and is stable.

Management of this centre can't stop air conditioning if there is only one sportsman inside as snow will melt and it will cost the company much more money to relaunch the centre again.

www.snej.com

Chase demand

AddeccoHere as an example I would like to offer Human Resources Outsourcing companies. For example IBM is the customer of Addecco and Zander outsourcing companies. This companies can easily chase the demand of their customers for new employees. Having a good database of available workers they do not hire them until there is a request from one of their clients. As soon as demand appears HR outsourcing company can hire the employee end rent it to customer with immediate coverage of the costs. If customer does not need this employee any more HR outsourcing company fire the employee and keep him as a candidate in the database.

Yield management

From my point of view here we can review as an example theme parks. While being a student in the university I was working during the summer vocations in Six Flags over Texas theme park in Dallas, TX.

Theme parks has a number of offers like "season pass", family tickets with discounted price.


  • Capacity of theme park is relatively fixed. It has number of rides, restaurants and shows with fixed capacity.
  • Market is definitely segmented.
  • Service can't be stored. It seems to be difficult to store the ride on the roller coaster.
  • The service is sold in advance as you by the ticket before you enter the park. Sometimes long time before.
  • Marginal cost is on the medium level.

Queue design

Let's review the queue design of the roller coaster. This queue is a mix of two designs: single queue and multi queue. The queue starts with the single queue design. This allows to structure the order of people going to the ride. At the closest point to the ride there is a split of the single queue into 10 queues to one trains as it has 10 seat rows. So this multi queue allows to minimise the time and simplify the structure of load. On the other side of the train there are 10 ways out. So load and unload are splitted. This also helps to minimise the time loss.


- One comment Not publicly viewable

  1. Neil McPhater

    Alexander,

    You have produced a very good blog for Lesson 6. I thought all four of your answers were extremely good choices – very well selected. I very much liked the way you used course material to validate your choice of theme park for yield management.

    The only small point I would add for reflection is to consider customer behaviour in the queue and to what extent it might have an impact. I often cite this as an example as I am someone with little patience who hates queuing.

    Well done.

    Ciao, Neil.

    08 Apr 2009, 06:19


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