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CMA Intermediate · Operations Management and Strategic Management · Introduction to Operations Management

Which statement best describes the difference between a manufacturing operation and a service operation?

Services are intangible and generally cannot be stored as inventory because they are produced and consumed at the same time, whereas manufactured goods are tangible and can be stocked. The other statements are overgeneralisations or reversals.

  1. AServices are intangible and typically cannot be stored as inventory, while manufactured goods are tangible and can be stockedCorrect
  2. BServices always require more capital than manufacturing
  3. CManufacturing involves customer contact during production while services never do
  4. DGoods cannot be standardised but services always can

Explanation

Key characteristics of services are intangibility, simultaneous production and consumption, and inability to store. Goods are tangible and can be held in inventory. The other statements are reversed or false generalisations.

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