Investments in Operational Attributes and Impact on Outcomes in Training Services

摘要

The service industry has grown considerably in the last century and investments in operational improvements have increased. Operational investments decisions have a huge impact on the profitability of the organization not only at present but also in the future affecting the sustainability of the organization. The service-profit chain is a framework that brings together several components in the service delivery process. Evaluations of service operations based on the service-profit chain and others have taken a static approach without any consideration to the feedback structure. We develop a system dynamics model to evaluate the impact of number of courses offered on profitability of training services. This is accomplished by incorporating an optimization structure using the hill-climbing algorithm. The results from the simulation are then discussed along with validation of the model.