The primary trade-off in service capacity planning is?
A) Cost of service capacity versus cost of holding inventory
B) Cost of service capacity versus cost of customer waiting
C) Cost of marketing versus cost of customer waiting
D) Cost of loss of goodwill versus cost of customer waiting

Question

Quizplus · Accepted Answer

Service capacity planning involves making decisions about how much capacity to have in order to meet demand. One of the key trade-offs in this process is between the cost of service capacity and the cost of customer waiting. If a company invests in more capacity, they can reduce the wait time for customers, but this comes at a higher cost. On the other hand, if they invest in less capacity, they may save money but customers may be forced to wait longer, which can lead to dissatisfaction and lost business.

The Primary Trade-Off in Service Capacity Planning Is