What Is an Important Difference Between Capacity Planning in Services

question 39

Multiple Choice

What is an important difference between capacity planning in services as contrasted to capacity planning in manufacturing operations?

• A)Time
• B)Location
• C)Demand volatility
• D)Utilization impacts service
• E)All of these

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Definitions:

Indirect Costs

Costs that are not directly traceable to a specific product or service but are necessary for the operation of a business, such as overhead expenses.

Apportion

To divide and allocate proportions or shares of a total amount among different entities based on a set criteria or formula.

Total Cost

The sum of all expenses incurred in producing a product or delivering a service, including direct costs like materials and labor, and indirect costs such as overhead.

Contribution Margin

A department’s net profit, used to cover indirect expenses.