In Designing Service Systems, as You Go from Mail Contact

question 34

Multiple Choice

In designing service systems, as you go from mail contact to phone contact to face-to-face total customization, which of the following is most appropriate?

• A) Sales opportunity decreases while degree of customer/server contact increases.
• B) Sales opportunity decreases while degree of customer/server contact decreases.
• C) Sales opportunity increases while degree of customer/server contact decreases.
• D) Sales opportunity increases while degree of customer/server contact increases.
• E) None of these choices are correct.

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Definitions:

Fixed Expenses

Costs that do not vary with the level or amount of goods or services produced or sold.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and profits.

Fixed Expenses

Expenses that remain constant regardless of the amount of output or sales within a brief timeframe, including lease payments, wages, and coverage fees.

Break-even Point

The level of production or sales at which total costs equal total revenue, meaning the company neither makes a profit nor incurs a loss.