Goods and Services Flashcards
- 5 differences between goods production and service operations:
o Goods are tangible while services are intangible
o Goods are produced before they are consumed; With services, production and consumption happen at the same time
o Goods can be stored in inventory while services cannot be stored for later use
o Quality assurance in goods is subjective and measurable, while the same for services is subjective
o Most manufactured goods can be patented while most services cannot be patented and hence can be easily copied
- Additional differences between service and goods:
o Goods are delivered in a uniform output while services output varies greatly based on customer needs
- Goods have little to no contact with customer while services is focused around high levels of customer contact
- What is the essence of service delivery?
o Services are activities that provide some combination of time, location, form, or psychological value
o Intangible and do not result in the ownership of anything
o Variability: the quality and level of service varies depending on who is providing them, when they provide them, and based on customer needs
o Perishability: services cannot be stored for use later. Once that day, time, or event passes, it cannot be sold again
- Examples of service industries:
o Airlines o Banks o Law Firms o Doctor o Business Consulting
- Why are services important?
o Important part of the economy in many countries
o Make up a large percentage of jobs
o Add psychological value and brand identity to a company
o When they add value, it increases customer satisfaction and higher profits
- What is the essence of manufacturing?
o Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools
o Goods are physical items that include raw materials, part, assemblies, and final products
o Raw materials are transformed into a tangible product that can be sold to other companies or to an end consumer
- Examples of manufacturing:
o Automobiles o Electronics o Appliances o Cosmetics o Holiday decorations
- Why is manufacturing important?
o The world needs manufactured goods in homes, offices, and businesses in order to function and operate
o Important for the economic development of a nation
o Goods are necessary for trade between countries and allow countries to buy and sell foreign goods and can help determine the wealth of a country
- What are non-manufactured goods?
o Goods that are not produced in a factory and grow without human intervention
- Examples of non-manufactured goods:
o Farm products such as fruits and vegetables
o Fishing, such as crabbing, because the product grows naturally in the ocean and humans harvest the product as is
