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 handling.

Question

Quizplus · Accepted Answer

Service inventory costs are related to idle production capacity rather than storage or handling. Services are inherently different from products as they are not produced and stored in a physical form. Instead, they are performed on demand, which means that an idle service provider means lost production capacity. Therefore, the inventory of services is related to idle production capacity rather than storage or handling, making choice E the correct answer. The other answer choices do not accurately reflect the difference between service and product inventory.

Why Is Inventory of Services Different from That of Products