CHAPTER 7

Balancing Demand and Productive Capacity for Quality Service

Introduction

To better understand the dynamics of balancing demand and capacity, it will facilitate learning if we recall the basic
definition or at least have a grasp of the concept of demand, capacity, and productivity. In the study of basic economics,
we learned that demand represents the amount of need of certain products or goods for the consumption of individuals
or markets. Parallel to this, in the tourism and hospitality industry, demand is the volume of services required by clients
or customers at any certain period of time. In the service industry, demand implies the quantity of services that are
required from the firms. These may include passenger seats in the airlines, tables for restaurants, rooms for hotels, or
attendants from spas. Although the previous examples talked about tangible materials, the actual demand speaks about
the provision of service to attend to the needs of the customers. Airline seats refer to transporting passenger to a
destination, tables refer to dining space for hungry customer, rooms for the accommodation during the stay, and
attendants refer to a therapy that will be accorded to clients

Going back to the original discussion on demand. some economic scholars mentioned that demand, for it to function
properly, has to have a counter force which is supply. Supply represents the amount of goods or products available for
consumption in the market. For the service industry, the supply side is synonymous to capacity. Since organizations
produce services rather than tangible goods, often refer to the output as capacity Capacity refers to the ability of
organization to provide or render services among their customers. It often relies on the amour of inputs in order to
produce services which can either sustain the requirements or fall short. Inputs normally come in different forms, such
as labor, time, space, and others, which will be discussed further in this chapter. The ability of organizations to create
services reflects an organization's productivity. Since organizations rely on profit to be sustainable, the primary objective
then of such organization is toward maximizing productivity.

This chapter discusses the concept of demand, capacity, and the challenges of matching demand and supply in the
service industry. Service performance gap occurs when an organization fails to manage demand, overutilizes its
capacities, caters to wrong customer mix, or becomes price-dependent. Most service organizations consider the
effective use of capacity as key success factor. The aim is to utilize employees, equipment, and facilities as productively
as possible.

Learning Objectives

At the end of this chapter, the students should be able to:

 understand the concept of demand:

 be familiar with capacity constraints, apply strategies on matching demand and capacity.
 learn the benefits and risks of yield management strategies;
 understand strategies for managing waiting lines when capacity and demandcannot be aligned; and
 understand customers' perceptions about waits and queueing systems.
Reality Bites

The Gutierrez family owns the Amiananti Bantay Farm and Resort located in Pangasinan. The farm is a very popular
resort destination every summer. It offers multiple activities like hiking, camping, fishing, swimming, horseback riding,
and all- terrain vehicle (ATV). It has facilities for overnight stays, including a dormitory building, multiple huts, and a
camping ground. Day visitors are treated to three adult pools and one kiddie pool. The 20-hectare lot is teemed with
fruit-bearing trees and a petting zoo of different farm animals.

Guests have to book at least six months prior to their stay in order to reserve a slot for the summer season. The
management is keenly observing the carrying capacity of the area, that is why walk-ins are strongly discouraged. A very
small percentage of guests are walk-ins and they have to wait to know if there are slots coming from "no-shows" or
cancellations. The farm is also strict in observing use of materials that are harmful to the environment Guests need not
bring anything in the resort because the package paid for already includes basic amenities. Guests are allowed to bring
personal items and clothes. Food, accommodation, and other utilities are provided. Service staff are always available to
attend to the needs of guests. They are trained to be courteous, flexible, and gracious to the guests and co-employees.

After the summer season, the farm closes for some time to allow the place to recover. Although the farm opens after
two months, there is barely any activity that happens during this time. Guests are almost inexistent, and operations are
at a minimum.

Given the situation, what should be the strategy or strategies in order to maximize productivity and yield of the farm?
What are the policies of the resort that could be retained? What should be changed? What should be done to bring in
customers after summer season?

Content

Service organizations must consider the different factors that affect demand and capacity. These factors may result in
conditions that post challenges to managers in maintaining the productive operation of the company. Most service
organizations are faced with the predicament of having fixed capacity and unpredictable demand. Unfortunately, as
discussed by Zeithaml, Bitner, and Gremler in their book Services Marketing 7th edition (2017), at any given moment, a
service organization may face any of the following conditions:

A. Excess in demand. The demand for services far surpasses the maximum available capacity. The situation often
leads to denying services to excess customer and losing the opportunity to gain profit.

b. Demand exceeds optimum copacity Quality of experience in this situation is deteriorating Customers can still be
accommodated, but the place already feels crowded. There is dissatisfaction of the services rendered.

c. Balanced demand and supply at optimum capacity. This condition reflects the ideal situation for both the
organization and the customers. The facility is in full capacity but is not strained; employees are busy but not
overworked. The customers receive good service on time and no delays.

Managing Demand
Managing demand has always been one of the primary considerations of service organizations to maximize
productivity. In order to manage fluctuating demand in a service business, it is a must to understand the nature of
demand, including demand patterns, reasons of fluctuation, and the market segments that create demand at any
given point in time.
a. Predictable Cycles. These refer to the periodic increase and decrease of demand levels at specific time which may
transpire at different intervals: daily (may happen by hour); weekly (may happen by day); monthly (may happen by
day or week); and/or yearly (may happen based on months or seasons). In cases where predictable cycles are
detected, the reasons they occur should be identified.

b. Random Demand Fluctuations. Contrary to the first condition, sometimes, demand appears to be random. There
is no predictable cycle that could be derived. Even so, the cause of demand can still be identified. A good example is
the weather condition of an area. The number of parkgoers increases if the weather is good and declines if the sky is
not clear of rain showers. Other random and unpredictable conditions that may affect demand include: health-
related incidents (accidents, heart attacks, and births); natural disasters (floods, fires, and hurricanes); or even acts
of war and terrorism.

Demand Patterns by Market Segment. A service organization that has thorough knowledge about its customers may
be able to come up with a strategy in order to cater more appropriately to its customers. With the analysis of the
profile of an organization's customer, it may be able to identity patterns of demand whether it is predictable or
random. The organization would then be able to design a service specific to the market segment.

Managers should be aware that applying an effective demand planning process may contribute to a reduction in the
level of disruptions caused by operational risks (Swierczek, 2019).

Upon learning about the patterns of demand among the different market segments, an organization can focus to
demand management activities. There are several basic approaches to management of demand:

a. takes no action and leave demand to find its own levels.

b. Reduce demand during peak periods.

C. Increase demand during low periods.

d. Inventory demand using a queuing system.

e. Inventory demand using a reservation system.

These approaches are options that guide an organization to improve its strategies to maximize profitability.
Customers may react positively or adversely depending on how well an organization manages to implement these
approaches. Naturally, customers react based on the convenience it brings to them. The first approach, take no
action, looks very simple but may be a hotbed of trouble among many service-oriented organizations. Ultimately,
customers may learn from experience or from word of mouth when they should stand in line to use a service and
when it will be available without delay. With the presence of competitors, customers may also be able to find other
service organizations that are more responsive.

Molding Demand Patterns through Marketing Mix Elements

Organizations often approach management of demand based on what fits their style and resources. The freedom to
choose and the diversity of choices to demand management has led organizations to be creative and resourceful.
Many organizations utilize the elements of marketing mix as tools to manage demand since it directly affects the
customers. Organizations can easily influence their clients to adjust accordingly by using the different elements of
the marketing mix.
Figure 7. 1. Elements of Marketing Mix

1. Use Price and Nonmonetary Costs to Manage Demand. The use of pricing is one of the most utilized way of
balancing supply and demand. Changes in price has an immediate and direct effect on the decision-making process
of customers. Pricing strategy is stronger when the services are price- sensitive. Changes in price may influence the
decision of customers to either delay or advance the timing of their purchase. Nonmonetary costs involve customer
decisions as to choosing convenience and preferences in availing services. Some customers would choose to dine in
a restaurant at times when they do not need to wait and to avoid crowded conditions.

2. Change Product Elements. There are service organizations that offer products that even any amount of price
discounts would translate to having business. In order to encourage customer demand, a new service product needs
to be introduced. The objective is to encourage the same set of customers, to find new other market segments, or to
cater to both An example is a swimming resort that offers water and other sports activities during summer may offer
to cater to teambuilding clients and customers or may offer function areas for variety of events.

3. Modify Place and Time of Delivery. For services that are continuously offered at specified time and place, service
organizations can capitalize to market needs by adjusting the time and place of delivery.

a. Vary the times when the service is available, Services maybe adjusted on schedules where market segments can
most likely avail of the services. Professionals may only have time to move around after office or during their
rest days. Shopping hours of malls may be extended to cater to different types of office workers. Business
process outsourcing (BPO) employees may require services beyond the usual day time hours.
b. Offer the service to customers at a new location. Visibility is the key to the success of some businesses.
However, not all service organizations can locate at strategic areas most of the time due to financial and logistics
concern. Service organizations can choose to be mobile and locate at different places at different times. Or
added service features can be offered to customers to generate business during lean times. For example, clothes
for laundry may be picked up and delivered by the laundry shop before and after washing.

4. Promotion and Education. Organizations can always use the multimedia to inform its clients about its operations,
innovations, and changes through advertising, publicity, or sales promotion. A strong communication effort may
help in managing demand even if the other elements of the marketing mix are constant.

Managing capacity
Among many organizations across different industries, service capacity is fixed. Fixed capacity can be due to
different factors depending on the type of service that an organization provides. These factors may include time,
labor, equipment, facilities, or a combination of these.

Among several service organizations, the primary constraint on service production is time. If the period of work of an
employee is not used productive, because of some reasons, then profits are lost. Or in case there is a high-level d
demand at a certain period of time, an additional time cannot be created in order to satisfy the demand.

some for service organizations that employ a number of employees, labor can be the primary capacity constraint. In
cases that demand fluctuates and, for reason, persists for some time, then the service organization will be very
concerned with idle labor and extra costs. Some other cases consider equipment as a critical constraint. Service
organizations that are dependent on their machineries to render service may consider the capacities of those
machineries as their limitation. If an airline company can only maintain a few small aircrafts, then the capacity of
those carriers defines the capacity limit of the organization. an
Many other organizations are limited by the facilities that they can provide Service organizations like hotels can only
sell a certain number of rooms; spas are limited to the number of bath areas; and restaurants are restricted to the
number of table and seats available.

To maximize the understanding the concept of capacity, it is imperative to learn the difference between optimal and
maximum use of capacity. These terms pertain to different situations. Optimal capacity would mean that the
resources of a service organization are fully utilized but not overused. And more importantly, customers still receive
quality and prompt service. Maximum capacity, on the other hand refers to conditions where the total limit of
service is fully utilized. The maximum use of capacity may result in excessive waiting by customers, leading to
customer dissatisfaction.

Human factor capacity, which includes people's time or labor, is more flexible and harder to specify as compared to
facilities and equipment. In cases where a service provider's capacity has been exceeded, it would most likely result
in diminished service quality, customer dissatisfaction, and employee burnout and turnover.

Stretching Capacity Levels

Capacity levels of some service organizations can be considered as elastic when it comes to accommodating more
demands. For example, bars can offer seats for around 50 people and allow standing room for 30 with enough space
for all However, during special holiday occasions, may be around 100 people can squeeze in and mix with the
partygoers.

Likewise, other capacities may be stretched. Employees and staff can be asked to perform at high intensity during
peak times. Although, because of human factor, the efficiency of their performance will only be as good until they
get tired, which may result in poor service. The capacity of some facilities can be extended when these are used for
longer periods. Cinemas or theaters that are screening from 11 am to midnight may add more screening hours to
accommodate more customers.

Moreover, the average amount of time customers spend in the service process may be reduced. Diners in a
restaurant will have a faster turnover if the services provided to them are faster. Seating of customers can be done
immediately as soon as the table previously used by other customers are quickly buzzed out, the menu is made
available; and the bill is promptly presented after the meal. Slack time in the delivery of service should be minimized

Aligning Demand and Capacity

Service organizations must have a clear understanding of the limits of their capacity and the patterns of demand
they face in order to come up with strategies to match the available supply with the demand. Matching capacity and
demand may be accomplished through the following strategies: level the fluctuations of demand by modifying
demand to match the existing capacity or adjust capacity according to demand fluctuations.

Strategies in Modifying Demand to Match Existing Capacity

This general strategy aims to reduce excess customers beyond the capacity of the organization during peak times
and to influence them to use the service during off-peak times instead. Service organizations will be able to
maximize productivity if they can move customers during slow periods or even attract new customers at this time.
This strategy may not be possible for other customers whose needs cannot be adjusted. For example, executives and
business people may not be able to move their flight schedules, hotel bookings, and other reservations at a later or
an earlier time. Customers belonging to this category will be considered as lost opportunities. The following
methods can be considered when trying to match the demand with the existing capacity:
 a. Communicate with Customers. Service organizations can create and maintain communication with customers to
inform them of the peak periods and to sway them to use the service at other times for them to avoid crowding,
delays, and long waiting time.

b. Modify Timing and Location of Service Delivery. Organizations may choose to adjust their operation time to cater
to market segments to disperse crowding. Others locate in strategic areas or offer online transactions to
accommodate customers whenever and wherever they are. Families usually go out and relax during weekends,
hence cinemas can increase the number of theaters showing family-oriented movies Bus and rail cards may be
purchased at convenience stores other than their usual ticketing booths

c. Offer Incentives for Off-peak Usage. Special discounts, promo packages, or freebies may be offered to
customers who will use the service during off peak periods
d. Set Priorities. Service organizations may choose to prioritize frequent and loyal customers during peak times.
This somehow guarantees a continued patronage to your organization. Organizations may also choose to serve
customers that need immediate attention or require greater considerations. Airlines would allow the elderly,
minors, or differently abled to board the plane before others.
e. Charge Full Price Service organizations may opt to charge the full amount to customers during peak periods and
not allow the use of discount cards or coupons Hotels may not be able to honor gift certificates during the
holiday season because they are fully booked.

Strategies in Adjusting Capacity to Meet Demand

The objective of this second strategy is to adjust the capacity of a service organization in order to match supply and
demand. Shifting capacity involves expanding the organization's ability to meet customer needs during peak periods
and minimizing capacity during downtime to minimize costs or wasting of resources The following are some of the
schemes that can be considered and adopted:

1. Increase Capacity Temporarily. Most of the time, capacities can be temporarily expanded to meet the demand.
Expanding capacities need not equate to inducing new resources, but instead, employees or staff, facilities, and
equipment will be programmed or required to work for longer and harder to sustain demand.

a. Extend People, Facilities, and Equipment Temporarily. For instances that there is a strong level of demand,
services may be extended temporarily. Malls extended their mall hours two weeks before Christmas day to
accommodate the Christmas rush shoppers It may be possible to extend the hours of service temporarily so
accommodate demand.

b. Use Part-time Employees. Service organizations usually call out additional workforce from their on-call list of staff
to supplement labor during the peak of the demand. Caterers and shopping centers hire part-time employees during
the holiday season to cope with the demand for events, functions, and holiday rush.

c. Cross-train Employees. Employees may be trained with multiple skills in order to make them perform tasks where
they are most needed. This would also address work issues where staff are underutilized in certain departments
while others are overworked.

d. Outsource Activities. Service organizations that are experiencing temporary peak in demand for internal service
operations, such as information technology, finance, or human resources, may just choose to outsource the service
instead of hiring and training new employees for a temporary position.

e.Rent or Share Facilities and Equipment. During the temporary peak periods, organizations may decide to rent
equipment and facilities instead of procuring new ones
2. Adjust Use of Resources. Also known as "chase demand" strategy, it aims to modify service resources to go after
the demand curve in order to match capacity with demand patterns. Still, the focus would be on people, facilities,
and equipment in relation to adjusting the basic mix and use of these resources.

a. Schedule Downtime during Periods of Low Demand. Operations may be downgraded during off-peak periods to
provide opportunity for people, equipment, and facilities to recover and not waste resources.

b. Perform Maintenance and Renovations. Repair, maintenance work, and renovations may be done during low
demand period.

C. Schedule Vacations and Employee Training Strategically. To ensure that the employees are at their best
whenever they are asked to perform, they need to be properly rested and trained. Vacation leaves and trainings
may be scheduled during off-peak times. In this way, operations will not be greatly affected and the staff are already
in tip-top shape during peak season.

d. Modify or Move Facilities and Equipment. Adjustments to facilities and equipment during slow demand period
should be done similar to adjustments being made during peak season. In this way, the organization need not put
too much strain to its equipment and facilities, hastening their deterioration.

e. Encourage Customers to Perform Self-service. Limited capacities can be reduced when customers learn to
perform tasks without having employees attend to them most of the time. Self. service facilities and technologies
may augment the labor force in providing services to customers.

f. Ask Customers to Share. Customers can be given options to share the services they are availing of. Transport
network vehicles may offer "ride sharing" schemes to people who are going on the same directions for a reduced
rate or fee.

g. Create Flexible Capacity. Organizations sometimes design their services to cater to specific segments of the
market. Organizations may design facilities that can be easily modified in order to cater to broader types of market
Restaurant tables may be specifically designed for pairs, families, or groups; it could be an issue if the customers of a
restaurant are in groups but the only tables that are free are for pairs. Organizations may be able to design tables
that could cater to pairs, to fours when combined, and to groups when combined further, and vice versa.

Increase Demand to Match Capacity

There are approaches in matching capacity and demand that are focused on increasing demand during conditions
where demand for service is low. The following may be considered with the aforementioned situation:

a Educate Customers. During periods of low demand, organizations may inform customers about the availability of
their services. Further advertising and promo materials may encourage and inform customers of the advantages
when availing of their services at this time.

b. Convert How the Facility is Used. Some organizations may opt to offer their facilities to be used for different
purposes, depending on the season of the year. Dormitories occupied by students studying in Baguio City during
school time may be offered as transient house for visitors during vacation time or Holy Week.

c. Modify the Service Offering. Service organization may modify the process of how they deliver their services to
increase demand. Spa and massage parlors can offer home services for customers who do not want to leave their
homes.
d. Differentiate on Price. Most organizations offer discounted or promo packages during slow seasons, Resorts and
hotels in summer destinations offer discounted fees for groups, families, or pairs who will book during the rainy
season.

Strategies in aligning capacities and demand abound. The organizations' ability to decide and choose the best for
them is a key to keep them profitable.

Productive Service Capacity

The term productive capacity denotes resources or assets that organizations utilize to manufacture goods and to
render services. For service-oriented organizations, productive capacity can be in the form of equipment, facilities,
infrastructure, and labor. This is also known as capacity management

Equipment is an important element of capacity since it is used during the process of rendering service. Equipment
are vital components in the delivery of services among organizations. This equipment facilitates the process in order
to provide the best and most immediate services to customers. This may take the form of small tools to a very
complex machine used to process or aide in the course of delivering service.

Facilities are resources that pertain to handling of customers and provisions to store or process goods and services.
They usually pertain to the buildings, structures, or premises where customer avail of the products. They also refer
to areas where storing and processing of goods sold to customers are located.

Infrastructure refers to public and private structures essential to deliver quality service to customers. It may include
structures such as roadways, bridges, ports. terminals, and other public utilities.

Labor refers to human elements that manipulate the process and deliver the goods and services required by the
customers.

Yield Management
Yield management is also known as revenue management. Organizations use this method to find the best
combination among price, customer, and capacity used. The objective of yield management to produce the best
possible return from a limited available capacity. Particularly, it tries to allocate the fixed capacity of a firm to match
the potential demand in various market segments in order to maximize revenue or yield. In a mathematical
presentation, yield management is:

Where:

Actual Revenue = Actual Capacity Used X Average Actual Price

Potential Revenue =Total Capacity X Maximum Price

Yield is basically a measure of the extent to which an organization's resources (time, labor, equipment, or facilities)
are achieving their full (revenue-generating) potential.

Yield management may seem to be the best tool to match demand and supply. but it has its share of risks, which are
the following:
a Loss of competitive focus. Organizations that are so focused on profit maximization may carelessly forget the
facets of service that provide long- term competitive success.

b. Customer alienation. Multiple price structures may create confusion and dissent among customers and may
perceive it as unfair.

c. Overbooking. Disenfranchisement may be felt by customers who will be affected by overbooking practices used
by yield management systems. d. Incompatible incentive and reward systems. Complains and resentment may
happen when employees feel like the incentive structures do not match their efforts

Inappropriate organization of the yield management function. Some organizations may have difficulty complying
with the requirements of the yield management methods to operate effectively.

Waiting Lines and Queuing Systems

Waiting is a phenomenon that happens everywhere. Also known as queue, it may happen whenever a system to
process a transaction is exceeded by the number of influx of dealings. Queues are manifestation of surplus of
requirements over the capacity to transact.

Mismatch of capacity management and demand often results in queueing, but sometimes, it is not possible to
manage capacity to precisely match demand, or vice versa. There are conditions where precise matching of capacity
and demand would be too costly for an organization to maintain. Ships and planes cannot be available anytime to
ferry passengers to certain destinations. A schedule has to be made to maximize productivity. Sometimes, even
scheduled flights that have specific times to arrive and leave may experience delays due to differences of length of
time for service of other flights in the same airport. There is queueing because other planes take longer to deplane
and take off.

Organizations may consider the following different strategies to deal with queueing issues:

1. Audit the Operational Process. The organization should study the operational process to pinpoint the possible
causes of queueing. Any part of the process may reorganize or redesign to eliminate lines and facilitate
movement. Some service organizations may not be able to eradicate lines; in this condition, concerned
organizations may have to choose what kind of queueing system to use; or if system is already present, the
organization may decide on how to configure the queue. Queue configuration is concerned with the design and
effect of queue system that will be placed. Specifically, it discusses the number of queues, the locations, the
space needed, and the impact on customers.
2. Institute a Reservation Process. An option for service organizations to avoid waiting lines in their facilities is to
put in place a reservation system. Using the reservation system would allow customers to choose any available
time they intend to arrive in the company. This would guarantee that the customers will be accommodated once
they arrive. Further, the reservation system would be able to spread demand to less popular time periods or
slots. The downside of this system would be customers who will be "no-shows" in their appointed time.
3. Differentiate Waiting Customers. Service organizations who have waiting lines usually come up with policies to
prioritize customers based on needs or profiles. Customers need not wait the same length of time to avail of the
service. Some organizations differentiate among customers to allow some customers to wait for a shorter
amount of time. The usual rule for choosing the next customer to be served is through "first-come, first- served"
basis. There are other factors or rules that may apply depending on company policy. The following are the other
bases of differentiating customers:
a. Importance of the customer. Some organizations may have frequent customers availing of the company services
regularly, or sometimes, customers who spend large amounts with the organization (also referred to as preferred
clients) can be given priority in service by providing them with a special waiting area or separate lines.

b. Urgency of the job. Customers who require more pressing needs may be served first. Often, this applies to
institutions that provide for medical needs or security concerns. In the regular day-to-day 'transactions, priority is
given to customers with essential issues more than those require routine checks.

c. Duration of the service transaction. Services may be differentiated on the basis of length of service required. If
upon diagnosis it was determined that it requires short service, then the customer may be referred to "express
lanes" for immediate disposal. Customers requiring more attention and may take time to address the issue will be
endorsed to a service provider that caters to specialized requirements.

d. Payment of a premium price. Some service organizations have special accommodations to customers who pay
extra. Customers in this category are often given priority, such as separate check-in lines or express systems for
airplane passengers, "fast pass" for theme parkgoers, or VIP lounge for "preferred clients."

4. Make Waiting More Pleasurable. Customers who are waiting may still be satisfied depending on how they will be
attended to by the service organization. It is not just the length of waiting time that has an impact to customers,
their experiences and conditions during the wait will also matter.

Reducing the waiting time of customer requires a multidimensional approach. Increasing capacity is not always the
best option among conditions where service organizations need to balance customer satisfaction vis-à-vis costs of
operation. Service organizations may consider other approaches, such as the following:

A. Revalidating the queuing system design (including configuration and wait options);
B. Fitting the queuing system according to market segments (needs. urgency, price, or importance of the
customer):
C. Managing customers' behavior and their perceptions of the wait (making the waiting time more pleasurable)
D. Installing a reservations system (booking or appointments to distribute demand), and Redesigning service
process to shorten transaction time (installing self-service kiosks). d. e.

Different Types of Queues

Managers have a lot of choices for queueing system. The challenge is for them to choose which best fit the
requirement of their organization.

1. Single-line, sequential stages. In this system, customers pass through several serving operations or segments, as
in a buffet line. Bottlenecks may happen. in any segment where it would take longer to undertake than the previous
segment

2. Parallel lines to multiple servers. This applies to establishments that cater to a big number of people at any given
time. The immigration section at the airport utilizes this queueing system.

3. Single line to multiple servers. This is also known as a "snake." In contrast to "parallel lines to multiple servers"
system, issues about line speed movements are addressed. Check-in counters of airline companies within the airport
premises cater to departing passengers who are checking in their luggage

4. Designated lines. This system segregates lines for different customers based on specific categories Immigration
personnel designate lanes for diplomatic passport holders, foreign passport holders, residents, overseas Filipino
workers (OFW), or Association of Southeast Asian Nations (ASEAN) countries
5. Take a number. Upon entry to the establishment, customers are provided with numbers from an automated
counter. The customers are given the opportunity to sit down, relax, or do something else while waiting for their
numbers to be called. This system caters to a significant volume of customers being attended to by organizations.
Telecommunication companies and other utility companies use this system of queueing

6. Waiting list. Food service establishments usually use this type of queueing system where customers are
requested to provide their names along with the size of their group. Customers wait until their names are called.
There are several designs of wait listing, which are the following

a. Party size seating - Customers wait until a table that matches the number of people in the company is available.

b. VIP seating-Favored customers are given priority slots and special rights

C. Call-ahead seating - Customers call the restaurant before arrival to hold seats for the customer

d. Large party reservations - Customers that require a significant number of seats and tables or a fraction of the
guest area are compelled to make arrangement prior to arrival.

Psychology of Waiting Time

The following are how people perceived waiting time at different conditions:

1. Unoccupied Time Feels Longer than Occupied Time. Customers that are doing nothing while waiting will likely be
bored and will observe the passage of time more than when they are doing something.

2. Preprocess Waits Feel Longer than in-process Waits. Customers tend to feel that the waiting time seems shorter
if they perceive that the service has started. Customer tend to believe that service has started and they are not
waiting anymore if they see that there are activities related to the upcoming service.

3. Anxiety Makes Waits Seem Longer. When customers become anxious, they carry with them negative impressions
about what they are experiencing Customers' anxiety may be addressed if they are properly informed on the length
of waiting time.

4. Unexplained Waits are Longer than Explained Waits. Customers who are aware of the causes of waiting are
usually more patient and less worried. Informed customers may have an estimated idea on how long they have to
wait

5. Unfair Waits are Longer than Equitable Waits. When customers think that they are unfairly attended to because
other customers who arrived after them have already been serviced, it will heighten the impression that waiting
seem longer. This happens when there is no visible queueing system and customers are trying to be served.

6. The More Valuable the Service, the Longer the Customer Will Wait. Customers expecting premium services are
more tolerant in terms of waiting.

7. Solo Waits Feel Longer than Group Waits. Customers who come in groups are more tolerant to waiting because
they can focus their attention on their companions while waiting. They may be oblivious of the time, especially if
they are into discussions of interesting topics.

8. Physically Uncomfortable Waits Feel Longer than Comfortable Waits. Waiting is burdensome when customers
are waiting in an uncomfortable situation. The discomfort magnifies the feeling of being in line for a long time.