Why is inventory of services different from that of products?
A) Time is less important to customers of services than customers of products.
B) Only service inventory can be reduced through more efficient movement of products.
C) There are larger costs associated with the handling of service inventory.
D) Unlike goods providers, the service provider is often unavailable when there is a demand for the service.
E) Service inventory costs are related to idle production capacity rather than storage or perishability.

Question

Quizplus · Accepted Answer

The inventory of services is different from products because service inventory costs are related to idle production capacity rather than storage or perishability. Unlike products, services cannot be stored for later use, so the costs associated with service inventory are related to the availability of the service provider and the efficiency of service delivery. Time is still an important factor for customers of services, but it is not the main driver of inventory costs. Efficient movement of products can help reduce inventory costs for goods providers, but for service providers, the focus is on managing production capacity to meet demand.

Why Is Inventory of Services Different from That of Products