Service Supply Chain Management In Organisations Write discussion post with references apa); What challenges exist for service firms that are experiencing

Service Supply Chain Management In Organisations Write discussion post with references apa);

What challenges exist for service firms that are experiencing insufficient demand? How can firms successfully manage excess capacity?” Cite examples.

Reply to two discussion posts:

Post 1:

In order for a business to survive there must be an equal balance of supply and demand. When supply and demand is balanced it is at equilibrium, which is good and where you want it to stay. When things are not balanced problems can arise. For example when Supply is less than demand there will be a shortage, but when supply is greater than demand there will be a surplus. Over capacity is defined as “a state where a company produces more goods than the market can take”. There are many ways businesses can deal with excess capacity. First companies can lower there production, by cutting back on production for a little it will allow the business to catch up until demand it back up again. Another way businesses can solve this problem is by reducing and cutting back on prices. Businesses can also solve over capacity exporting the over capacity to other areas where there is a demand.

https://etn-socrates.eu/understanding-overcapacity-supply-vs-demand/

Post 2:

There are challenges that service firms face when they experience insufficient demand. These challenges include trying to gain more market share, finding out what happened to make demand fall off (because it is not a product that is poor quality, there are multiple parts of the service that has to be evaluated), and by determining how much of what parts of the business have to be cut back in order to operate, or to take a loss and innovate the operation to continue growth (Lovelock, Wirtz, 2011) . Firms can manage this excess capacity by determining why it is that their demand dropped, and by preforming market research of competitors, as well as consumer opinion (Lovelock, Wirtz, 2011) . Also, evaluating multiple aspects of the service, and determining what the service company can cut down on, and what are the more important parts of the service must be kept in order to provide the service at the highest level possible. A perfect example of this is the housing market. When there is a buyers market (a 7+ month supply of real estate inventory) and there are an excess of homes sitting on the market for a long time, mortgage companies weren’t making as many sales (Martin, 2019) . The way they were able to remain profitable was by evaluating their service, and raise interest rates so that they are able to make more profit per consumer, since they aren’t getting as many loan applicants (Martin, 2019) . Now that the market is more of a seller’s market (5- Month Supply of real estate inventory), mortgage companies can provide more competitive rates due to there being an abundance of mortgages being financed right now (Martin, 2019) .

References:

Lovelock, C. & Wirtz, J. (2011). Services Marketing: People, Technology, Strategy (7th ed.). New York: Pearson Education.

Martin, E. J. (2018, December 13). 2019 Real estate market forecast: Power shifts to buyers. Retrieved from https://themortgagereports.com/45054/2019-real-estate-forecast