It is strategically important for the service provider to have enough of resources in order to match demand for the service. This strategy is oriented towards the quantity. However, from the customer’s view, the volume of the service output is hardly a significant issue, because the
customer usually buys only one unit of output (e.g. haircut)
or one package of service (e.g. holiday tour). The customer is therefore inclined to give priority to service quality in- stead of quantity (Sahay, 2005). Yet, the actual volume of operations is determined by the variation of demand over time (McLaughlin, 1996). As a consequence, the productivity ratio of service operations may vary greatly from one time period to another, if it is measured as a quantity ratio. Due to the variation in the amount of the total demand across time, the service provider has to solve two basic problems related to the quantity aspect: capacity size and capacity scheduling (McLaughlin et.al., 1991).