In a service process, capital intensity varies with volume in both front office and back office operations.

Question

Quizplus · Accepted Answer

Capital intensity refers to the ratio of capital expenditures to labor costs. The level of capital intensity depends on the volume of operations. As the volume increases, more capital equipment may be needed in both the front office (customer-facing) and back office (supporting) operations. Therefore, the statement is true.

In a Service Process, Capital Intensity Varies with Volume in Both