Which of the following most likely indicates the existence of a cost gap?
A) The price/value proposition is appropriate for a less demanding segment.
B) The price/value proposition is appropriate for a more demanding segment.
C) Service levels are too low, and the costs are too high.
D) Service levels are right, but the costs are too low.
E) Service demands meet service output levels.

Question

Quizplus · Accepted Answer

Service levels that are too low and costs that are too high are a clear indication of a cost gap, where the company is not able to provide the desired level of service at an acceptable cost. Option A may indicate a market positioning gap instead, while option B could indicate a performance gap. Option D is not a likely scenario, as costs that are too low may result in poor quality service or products. Option E does not provide clear evidence of a cost gap.

Which of the Following Most Likely Indicates the Existence of a Cost