Why Is Inventory of Services Different from That of Products

question 219

Multiple Choice

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 perishability.

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Definitions:

Coal-Powered

Refers to machines, plants, or devices that operate or are fueled by coal.

Electrical Generator

A device that converts mechanical energy into electrical energy, typically through rotating a coil within a magnetic field.

Externality

A cost or benefit arising from an economic activity that affects third parties who did not choose to incur that cost or benefit.

Incentive

Something that motivates or encourages an individual or entity to act in a certain way.