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Service Operations Require Additional Inventory Because of the Unpredictability of Consumer

question 12

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Service operations require additional inventory because of the unpredictability of consumer demand.


Definitions:

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.

Total Revenue

The sum total of financial gains a company secures from its commercial transactions or service provisions during a certain interval.

Quantity Demanded

The aggregate quantity of a product or service that buyers are prepared to buy at a distinct price point, during a specific time frame.

Marginal Revenue

The extra revenue generated by the sale of an additional unit of a product or service.

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