Chapter 13, Managing Demand and Capacity

II. Some years, the Spurs are in the running for the NBA title. As the team approaches the end of the series fan momentum and attention increase. This increase in attention and attendance presents problems for the Spurs management. The problems revolve around the lack of inventory capability. Service firms cannot build up inventories, in this case, seating, during periods of slow demand to use later when demand increases. This lack of inventory capability is due to the perishability of services and their simultaneous production and consumption. The chart on page 384, Figure 13-1, illustrates the variety of potential outcomes (p. 385): excess demand, demand exceeds optimum capacity, demand and supply are balanced, and excess capacity. Think of what these possible outcomes might mean for the Spurs when it comes to selling seats, operating the facilities, managing labor, food, parking, air conditioning/heating, restrooms, etc., and managing fan expectations. Specifically, what are the challenges for Spurs management under each scenario?

Organize the response. There will be four sub-headings: Excess demand, demand exceeds optimum capacity, demand and supply are balanced, and excess capacity. Envision what it means to operate under each scenario for the Spurs. Be specific with your examples.

	Excess Demand	Demand Exceeds Optimum Capacity	Demand & Supply are balanced	Excess Capacity
Seats
Managing Labor
Food (concessions)
Parking
A/C & Heating
Restrooms