Combining Operations and Marketing to Manage Capacity and Demand in Services

Abstract

Although profitability is generally increased when services do well at matching demand and capacity, service managers continue to struggle in this area. This article summarises major demand and capacity management literature from both operations and marketing fields with the view to combine the knowledge into a pragmatically based framework. The primary focus is on services that cannot schedule customers (e.g., banks, supermarkets), since these provide the greatest challenge for demand management. Narrowing this further, the article gives preference to work that has information useful to promote future modelling efforts.