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CMA Intermediate · Operations Management and Strategic Management · Designing of Operational Systems and Control

A firm uses a shared kitchen to serve both dine-in customers and a cloud-kitchen delivery app. Which feature most clearly distinguishes service operations from manufacturing operations in the dine-in case?

The key distinguishing feature is that the customer is present and participates, so production and consumption happen at the same time. Services are intangible and perishable and cannot be stocked, unlike manufactured goods, which can be stored and inspected before sale.

  1. AOutput can be stored in finished-goods inventory for months
  2. BCustomer is present and participates, so production and consumption occur simultaneouslyCorrect
  3. COutput is always tangible and can be inspected before sale
  4. DCapacity can be built up in advance during off-peak periods

Explanation

Services are characterised by intangibility, perishability and simultaneity of production and consumption, with customer involvement. The other options describe manufacturing traits, since goods can be stored and inspected before sale.

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