Discuss What Servitization Means and the Advantages and Challenges That

question 41

Essay

Discuss what servitization means and the advantages and challenges that accompany it.

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Definitions:

Fixed Overhead

Regular, predictable costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Variable Overhead

Costs that vary directly with the level of production or business activity.

Direct Labor

The workforce directly involved in manufacturing products or delivering services, whose costs are directly attributable to the production.

Direct Materials

Materials that can be directly attributed to the production of specific goods or services and are an essential component of finished products.