A barber shop is a service organization. Four barbers work from 9:00 a.m. to 5:00 p.m., and they try to stay busy seeing customers the whole day but often must sit and wait between clients. This means that
A) service firms typically do not stay in business over ten years.
B) if a service organization has excess capacity that goes unused, that service capacity has been lost forever.
C) service capacity loses its value over time.
D) service firms are typically more hectic to work at and do business with than manufacturing firms.
E) time is not as important an issue for service firms compared to manufacturing firms.

Question

Quizplus · Accepted Answer

B) Service capacity, unlike physical goods, cannot be stored for future use. If a service, such as a barber's time, is not utilized when available, that opportunity to generate revenue is lost forever.

A Barber Shop Is a Service Organization