Question
Groomed Run Cleaning Services operates in a large ski resort town, providing cleaning services for hotels and privately owned rental units. Currently, the company has
Groomed Run Cleaning Services operates in a large ski resort town, providing cleaning services for hotels and privately owned rental units. Currently, the company has the capacity to clean 300 units per day. It is now November, and long-term weather forecasts indicate that it will be an exceptional snow year at the resort, which would likely result in abnormally high demand and room turnover. Which of the following statements is true?
a) As Groomed Run is a service provider, its design capacity and effective capacity will be equal.
b) If Groomed Run increases the number of cleaning crews available in anticipation of increased demand, it will be following a capacity lag strategy.
c) If Groomed Run follows a capacity lead strategy, it will run the risk of having to turn away potential work contracts.
d) Groomed Run should use standard financial evaluation techniques to help it decide whether, and when, to increase capacity.
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