Capacity management in the service industry
Capacity management, one of the most important aspects of operating an organization, refers to managing the amount of what an organization has and uses to perform work effectively and efficiently. Yu-Lee (2002) explains that capacity management is important because it is a significant component of a firm’s costs, represents a large amount of a firm’s assets, and impacts a firm’s ability to manage cash flow, the overall ability to operate and perform, and the organization’s brand and brand image. Capacity can significantly influence the quality of products and services and, therefore, influence customer satisfaction. Customer satisfaction can ultimately affect the organization’s brand image and reputation.