The University Bookstore – Textbook Department experience a peak season business usually in the first few weeks of each school semester. The bookstore serves about 21,600 customers in a 12 workdays of the peak season of semester at a daily time frame of 9 am- 9pm. About 30 percent of the bookstore’s customers buy four books while 25 percent buy three. Twenty percent of the customers buy two books while 15 percent buy five books, 10 percent buy one book.
The bookstore spends .5 minutes for every one book of cash transaction per customer, 1.6 minutes for every one book of check transaction per customer, and 1.4 minutes per one book of credit card transaction per customer. Most or 40 percent of the customers pay cash, while 40 percent pay through check, and only 20 percent pay through credit card.
The first two days of the semester is the busiest at the University Bookstore as the total volume doubles the daily demand in 12 days. The peak hours in the first two days are from 12 pm to 4 pm and the volume of sales is triple the daily average demand during 12 days.
The University Bookstore’s Capacity and Demand during the peak hours
The bookstore can transact 120 books cash payments per hour, 37.5 books/buyers check transactions per hour, and 42.9 books credit card transactions per hour. Such means that one cashier can attend to a maximum of 1440 buyers per 12 hours a day.
The demand during the peak hours12pm-4pm is triple the average demand during the regular days. Such mean that a cashier needs to serve about 1080 customers/book orders per hour. Such is computed by 1440 buyer/orders per day x 3 = 4320. The product, 4,320, shall be demand during the peak periods.
What the manager can do
There are several ways of managing the sudden high demand of orders during the peak hours for better services while obtaining operational efficiency. Michael Hammer (2004) of the Harvard Business Review stressed the importance of operational innovation in obtaining higher revenue/net income and increasing market share. He mentioned that the companies should not undervalue operational innovation as it can produce long term growth, price competitive edge in the ways that are usually unknown to the competitors.
W. Earl Sasser (1976) stated several ways of managing supply and demand and among them include altering demand through pricing, developing non-peak demand, developing complementary service, and creating reservation systems. Sasser (1976) also mentioned ways to manage supply by using part time employees, maximizing efficiency, increasing customer participation, and investing in the expansion ante.
Roy Shapiro (2013) emphasize the importance of the monitoring of the quality control in the products and services as it largely contributes in the good customer experience and, hence, profitability.
In the case of the University Bookstore, it is very advisable to apply different approaches in the management of the supply and demand. The manager of the bookstore can propose, plan, and implement ways to highly increase the capacity of the store to serve the customers during the peak season without investing too high to maintain operational efficiency.
Some ways can be the following: hire for needed part-time-employees during the peak season, applying reservations systems to help them purchase in other schedule at their convenience, and opening an online retail store version so that large share of customers can buy online. Inducing demand in the non peak hours such as providing reasonable discounts on non-peak hours and days to transfer a significant portion of demand in the non peaking hours can be an additional way of managing the demand during the peak season.
The University Bookstore has three trimesters and each trimester has peak periods. During the breaks, the management of the University Bookstore has all the time to plan about how it can handle the demand during the peak seasons with the listed possible ways to manage demand.
After successfully implementing the suggested ways, the University Bookstore should also plan how it can keep the high level of sales during the non-peak season. Such can be done by providing discounts and early reservations for the next year sales of the incoming students at the higher level. Students may wish to buy books for the next year in advance or have their siblings reserved for books for next year to save themselves from the hassle of falling lines.
The manager of the University Bookstore should also monitor the quality of its products and services. It must ensure that the products sold and delivered are new and in right packaged and texture. It must also ensure that products ordered online and reserved are delivered on time and as promised. It needs to ensure that customers do not have a long wait whenever they buy in the store.
Such will help the company achieve good sales, manage in-store demand, and expand in localities. With such applications, online and mobile selling, the University Textbook can also tap other students in the Universities outside the states as they provide convenient way of ordering. They can serve the other universities with no textbook departments are have lower access to text books. It can also generate enormous profit even during the lean months with the online and mobile stores as the applications can also tap students outside the United States with different school months.
Online store and the availability of books in the mobile application can be innovative operations that can help the company generate enormous revenues and profits through the school year. As the company builds the client base and ensures whole year high sales, the company can now look at employing more individuals for regular bookstore jobs to help more customers. More employees at an ensured expansion help the company meet the growing demand in the market and to support its direction for leadership.
References
Hammer, M. (September 2004). Deep Change: How Operational Innovation Can Transform Your Company. Harvard Business Review, 82(9).
Sasser, W. (November, 1976). Match Supply and Demand in Service Industries. Harvard Business Review, 54(6).
Shapiro, R. (September 2013). Operations Management Reading: Managing Quality with Process Control. Boston, Harvard Business Publishing. Harvard Product No. 8020-PDF-ENG
