Service capacity decisions have all but one of the following strategic characteristics:
A) the decision to invest in capacity will attract competitors.
B) financial investment in capacity must be balanced against the costs of lost sales.
C) inadequate short-term capacity needs can generate customers for the competition.
D) hostile customers can result from inadequate capacity following a marketing campaign.

Question

Quizplus · Accepted Answer

All of the characteristics listed except for A are strategic considerations when making service capacity decisions. The decision to invest in capacity can attract competitors because it may be seen as a profitable market opportunity. This can be a strategic consideration to weigh when making the decision to invest.

Service Capacity Decisions Have All but One of the Following