1.2 Describe the key concepts of creating value with services

Question 1

Cost

Answer 1

The amount of money spent on a specific activity or resource

Two types of costs:

• Imposed cost of the product or service
• The removed cost that the service provider bears, such as the cost of staffing technology, and other overhead items.

Question 2

Value

Answer 2

Is the perceived benefits, usefulness, and importance of something.

• Value is fundamental to the concept of a service
• Value is co-created by a service provider and a service consumer
• Service providers should seek to build interactive relationships with their customers.

Question 3

Organization

Answer 3

A person or a group of people that has its own functions with their customers. Relationships can be internal or external.

Question 4

Output

Answer 4

A tangible or intangible deliverable of an activity that produces specific deliverables.

Question 5

Risk

Answer 5

A possible event that could cause harm or loss, or make it more difficult to achieve objectives.

It can also be defined as uncertainty of outcome, and can be used in measuring the probability of positive outcomes as well as negative outcomes

Question 6

Outcome

Answer 6

A result for a stakeholder enabled by one or more outputs

• For example, the ability to track and manage customer payments is an outcome

Question 7

Utility

Answer 7

Functionality offered by a product or service.

Enhances performance, or reduces constraints

Question 8

Warranty

Answer 8

The assurance that a product or service will meet agreed requirements.

Typically includes, availability, capacity, security, and continuity.