11.4.4 Matching supply and demand
One of the special problems confronting services is that service output is constrained by capacity, in contrast to manufacturing organisations that possess flexible capacity because they are able to work overtime and make use of inventories. Services organisations are unable to use the same strategies because they are directly dependent on customers for demand, and when customers are present, that demand must be met otherwise it is lost. Also services are perishable and thus cannot be inventoried meaning that supply cannot be postponed to a later time.
In short, the customer's presence in the service system adds a level of uncertainty and urgency meaning that it is imperative that a service organisation attempts to manage supply and/or manage demand.
Now that we have dealt with both participants and process the final element of the expanded marketing mix to be discussed is that of physical evidence.