Author Question: Services cannot be inventoried, but most services have a physical inventory component. What does ... (Read 43 times)

Diane · **on:** Aug 10, 2018

Services cannot be inventoried, but most services have a physical inventory component. What does this mean?

What will be an ideal response?

Question 2

Name the physical inventory unit for airlines, hotels, car rental companies, spas, and restaurants.

What will be an ideal response?

canderson530 · **Reply #1 on:** Aug 10, 2018

Answer to Question 1

The reason services cannot be inventoried is that services cannot be produced and put aside to be consumed at another time. The production of most every service is accomplished by using physical inventory (ex., restaurant seats, hotel rooms, etc.), employees, customer participation (ex., in a spa), and consumable goods on-hand (ex., food in a restaurant). So this statement is pointing out the word inventory has two different meanings. Inventory can refer to the whole service available for sale. Inventory can also refer to the amount of the physical component of a service available to produce the whole service. Note that consumable goods on-hand could also be referred to as a third type of inventory.

Answer to Question 2

Seats, rooms, cars, treatment rooms (or even tables), and seats.