Service Systems Engineering and Management

A. Ravi Ravindran, Paul M. Griffin, Vittaldas V. Prabhu

• Publisher: CRC Press
• Year: 2018
• Print ISBN: 9781498723060
• eBook ISBN: 9781498723084
• Topic: Business
• Subtopic: Operations
• Index: Business

Recipient of the 2019 IISE Institute of Industrial and Systems Engineers Joint Publishers Book-of-the-Year Award

This is a comprehensive textbook on service systems engineering and management. It emphasizes the use of engineering principles to the design and operation of service enterprises. Service systems engineering relies on mathematical models and methods to solve problems in the service industries. This textbook covers state-of-the-art concepts, models and solution methods important in the design, control, operations and management of service enterprises.

Service Systems Engineering and Management begins with a basic overview of service industries and their importance in today's economy. Special challenges in managing services, namely, perishability, intangibility, proximity and simultaneity are discussed. Quality of service metrics and methods for measuring them are then discussed. Evaluating the design and operation of service systems frequently involves the conflicting criteria of cost and customer service. This textbook presents two approaches to evaluate the performance of service systems – Multiple Criteria Decision Making and Data Envelopment Analysis. The textbook then discusses several topics in service systems engineering and management – supply chain optimization, warehousing and distribution, modern portfolio theory, revenue management, retail engineering, health systems engineering and financial services.

Features:

• Stresses quantitative models and methods in service systems engineering and management
• Includes chapters on design and evaluation of service systems, supply chain engineering, warehousing and distribution, financial engineering, healthcare systems, retail engineering and revenue management
• Bridges theory and practice
• Contains end-of-chapter problems, case studies, illustrative examples, and real-world applications

Service Systems Engineering and Management is primarily addressed to those who are interested in learning how to apply operations research models and methods for managing service enterprises. This textbook is well suited for industrial engineering students interested in service systems applications and MBA students in elective courses in operations management, logistics and supply chain management that emphasize quantitative analysis.

1Service Systems: An Overview

At its heart, this book is about the design and control of service systems, as evidenced by the words “engineering” and “management” in its title. In this chapter, we begin with the meaning of “goods” and “services,” their differences, examples of service systems, and the role of services in our economy. We also introduce the meaning of “service quality” and how to measure it.

1.1Goods and Services

People all over the world use a combination of goods and services. Goods are tangible physical objects (big and small) that we use or consume daily, while services are processes, deeds, or performances (sometimes invisible) that we experience or enjoy. Goods are generally manufactured in distant locations and shipped all over the world, while most services are produced closer to home. The definition of goods and services is not black and white; there are a lot of gray areas. For example, when you buy a car, it is considered a “good”; if you lease a car, it becomes a “service”! Given below are some examples of goods that we use from morning till evening in our daily lives:

• Toothpastes, toothbrushes, and soaps
• Coffeepots and stoves
• Cereals, breads, and eggs for breakfast
• TVs to check the news and weather
• Smartphones and computers to read e-mail
• Cars to drive to work
• Furniture and equipment (including computers) to do our work in the office
• Vegetables and meats for the evening dinner

For the above activities, we also use the following services:

• Water supplied by the local utility
• Electricity supplied by a power company
• Natural gas for cooking
• Cable TV and Internet for entertainment and information
• Services by telecommunication companies
• Roads and highways maintained by government agencies (state and local)

In addition, retail services (drugstores and supermarkets) make the goods we buy for our daily needs available. Instead of a home-cooked evening meal, we may decide to dine at a local restaurant and go to a movie, availing ourselves the services provided by the hospitality industries. Instead of driving our car to work, we may use a taxi (yellow cab, Uber) or public transportation (buses or trains). When you use your credit card to pay for goods at the retailers, you are using the financial services to process those transactions.

1.2Differences between Goods and Services (Daskin 2010; Davis and Heineke 2003; Fitzsimmons and Fitzsimmons 2006; Metters et al. 2006)

There are four key differences between goods and services:

1. Intangibility
2. Perishability
3. Proximity
4. Simultaneity

1.2.1Intangibility

Goods, such as cars, TVs, computers, clothing, and fo...

Table of contents

• Cover
• Half Title Page
• Series Page
• Title Page
• Copyright Page
• Dedication
• Contents
• List of Figures
• List of Tables
• Preface
• Acknowledgments
• Author
• Chapter 1 Service Systems: An Overview
• Chapter 2 Forecasting Demand for Services
• Chapter 3 Design of Service Systems
• Chapter 4 Evaluation of Service Systems
• Chapter 5 Supply Chain Engineering
• Chapter 6 Warehousing and Distribution
• Chapter 7 Financial Engineering
• Chapter 8 Revenue Management
• Chapter 9 Retail Engineering
• Chapter 10 Healthcare Delivery Systems
• Chapter 11 Financial Services
• Index