41) The emergency room staff in Houston’s largest hospital is pleasantly surprised when a four-
day Fourth of July weekend brings in few accident victims for treatment. They know from
experience that such public holidays usually have high rates of accidents. For the hospital’s
business office, the lower demand for the emergency room services means
A) a break in the service continuum.
B) its services are no longer tangible.
C) its services can be separated from the staff.
D) the hospital has idle production capacity.
E) an opportunity for gap analysis.
42) Beverly has 15 tax accountants on her staff. During the months of February, March, and
April, her staff is overworked and she may even hire more employees to meet the tax preparation
needs of her clients. Beverly is not currently experiencing ________; in fact, all of her
employees are fully being used.
A) off-peak pricing
B) idle production capacity
C) static demand
D) capacity marketing
E) capacity inventory
43) Southwest Airlines operates a daily flight between Chicago and Phoenix using a Boeing 737,
which has a capacity of 120 passengers. During the past month, the flight has averaged 112
passengers. Once the plane takes off, the empty seats generate no revenue for the airline for that
flight. What unique aspect of services does this situation describe?
A) incongruity
B) intangibility
C) inconsistency
D) inseparability
E) idle production capacity
44) The ________ cost of a service is the cost of paying the person used to provide the service
along with any needed equipment.
A) intangibility
B) inconsistency
C) inseparability
D) inventory
E) hidden
45) For Merrill Lynch, it is possible to minimize ________ by having its financial advisors
compensated through commissions.
A) shrinkage
B) seasonal absenteeism
C) economic recessions
D) derived demand
E) inventory carrying costs
46) In retail stores, inventory carrying costs can be reduced by
A) using a straight salary compensation plan.
B) hiring additional full-time personnel.
C) allowing personnel to work overtime.
D) minimizing employee absenteeism.
E) reducing worker hours.
47) The inventory costs of services include
A) equipment and training costs.
B) management and material costs.
C) service delivery and spoilage costs.
D) salary of service provider and equipment costs.
E) salary of service provider and training costs.
48) The inventory carrying costs of real estate agencies are low because they
A) use a straight salary compensation plan.
B) allow personnel to work any hours a day and any number of days per week.
C) decrease the number of workdays per week, but increase the hours per day.
D) have employees who work on commission and need little expensive equipment.
E) are responsible for their own training, transportation, and supplies.
49) Which service listed below has the lowest inventory carrying cost?
A) restaurant
B) automobile repair
C) amusement park
D) dry cleaner
E) animal hospital
50) Which service listed below has the lowest inventory carrying cost?
A) railroad
B) hotel
C) long-term care facility
D) airline
E) insurance company
51) The inventory carrying costs of airlines is high because they
A) use a straight salary compensation plan for the large numbers of flight attendants.
B) have high-salaried pilots and very expensive equipment.
C) allow baggage personnel to work overtime.
D) decrease the number of workdays per week, but increase the hours per day.
E) use a commission compensation system for their reservationists.
52) The highest inventory carrying costs would most likely be for which of the following
services?
A) real estate agencies
B) dry cleaners
C) auto repair centers
D) hair salons
E) hospitals
53) Which service listed below has the highest inventory carrying cost?
A) university
B) hotel
C) auto repair garage
D) amusement park
E) insurance company
54) The range of offerings from the tangible to the intangible, or product-dominant to service-
dominant, is referred to as the
A) service continuum.
B) product continuum.
C) tangibility line.
D) inseparability span.
E) customer contact audit.
55) According to the service continuum, what are offerings such as theaters, advertising
agencies, and air travel?
A) product-dominated offerings
B) people-dominated offerings
C) service-dominated offerings
D) equipment-dominated offerings
E) idea-dominated offerings
56) According to the service continuum, what are offerings such as neckties, dog food, and
tailored suits?
A) product-dominated offerings
B) people-dominated offerings
C) service-dominated offerings
D) equipment-dominated offerings
E) idea-dominated offerings
57) According to the service continuum, which of the following offerings has the highest level of
intangibility?
A) tailored suit
B) advertising agency
C) tutoring service
D) fast-food restaurant
E) salt
58) According to the service continuum, which of these offerings has an equal balance of
tangible and intangible attributes?
A) tailored suit
B) tutoring service
C) dog food
D) fast-food restaurant
E) movie theater
59) According to the service continuum, which of the following offerings has the lowest level of
intangibility?
A) designer dress
B) law practice
C) tutoring service
D) cat food
E) baking soda
60) Services can be classified by
A) their method of delivery.
B) their use of idle capacity time.
C) the nature of their ownership.
D) their location on perceptual maps.
E) organizational reach.
61) Services can be classified according to whether they are
A) national or global.
B) used by independent contractors.
C) privately owned or publicly owned.
D) delivered by people or equipment.
E) owned by individuals or corporations.
62) Services can be classified according to whether the provider
A) is national or global.
B) uses independent contractors or not.
C) is privately owned or publicly owned.
D) is owned by individuals or corporations.
E) is a for-profit or nonprofit organization or a government agency.
63) Consider Figure 12-4 above. Services can be classified by their method of delivery. Box A
represents
A) government-delivered services.
B) people-delivered services.
C) fee-delivered services.
D) equipment-delivered services.
E) nonprofit-delivered services.
64) Consider Figure 12-4 above. Services can be classified by their method of delivery. Box B
represents
A) government-delivered services.
B) people-delivered services.
C) fee-delivered services.
D) equipment-delivered services.
E) nonprofit-delivered services.
65) Services can be classified by their method of delivery. Services such as ATMs, taxis, and
airlines are considered
A) government-delivered services.
B) people-delivered services.
C) fee-delivered services.
D) equipment-delivered services.
E) nonprofit-delivered services.
66) Services can be classified by their method of delivery. Services such as management
consulting, plumbing, and cleaning are considered
A) equipment-based services.
B) technology-based services.
C) fee-based services.
D) people-based services.
E) nonprofit services.
67) The categories for people-based services include
A) volunteers, skilled operators, and professionals.
B) unskilled labor, skilled labor, and professionals.
C) unskilled operators, unskilled labor, and skilled labor.
D) automated, skilled operators, and unskilled labor.
E) automated, skilled operators, and professionals.
68) Which of the following is the best example of a people-based service?
A) movie theaters
B) airlines
C) lawn care
D) vending machines
E) taxis
69) What do a security guard, a plumber, and a management consultant have in common?
A) They are all tangible services.
B) They do not have problems with idle production capacity.
C) They are all equipment-based services.
D) They are all people-based services.
E) They never use off-peak pricing.
70) Three categories for equipment-based services are
A) unskilled labor, those operated by relatively unskilled operators, and self-serve.
B) professionals, those operated by relatively unskilled operators, and automated.
C) automated (self-serve), those operated by relatively unskilled operators, and those operated by
skilled operators.
D) unskilled labor, skilled labor, and professionals.
E) those operated by skilled operators, unskilled labor, and professionals.
71) Compared with people-based services, equipment-based services do not have the marketing
concern of
A) intangibility.
B) insensitivity.
C) inventory.
D) inconsistency.
E) immeasurability.
72) Equipment-based services do not have the marketing concern of inconsistency because
________ have been removed from the delivery of the service.
A) risk and product liability
B) people
C) learning requirements
D) automations
E) accessories
73) Equipment-based services, such as ATMs, online brokerage firms, and automated car
washes, do not have the marketing concern of
A) inconsistency.
B) intangibility.
C) inseparability.
D) inventory.
E) independence.
74) Which of the following is the best example of an equipment-based service?
A) lawn care
B) doctors
C) taxis
D) lawyers
E) janitorial services
75) What do a dry cleaning service, an automated car wash, and electric utilities have in
common?
A) They are all tangible services.
B) They are all people-based services.
C) None of them has problems with idle production capacity.
D) They never use off-peak pricing.
E) They are all equipment-based services.
76) What do an online travel agency, a limousine service, and a music streaming service have in
common?
A) They are all strictly tangible services.
B) They are all people-based services.
C) None of them has a problem with idle production capacity.
D) They are all equipment-based services.
E) They all require skilled operators.
77) For nonprofit organizations, excesses in revenue over expenses are
A) taxed at one-half the rate of for-profit organizations.
B) distributed equally to all of the organization’s shareholders.
C) returned to the organization’s treasury to allow the continuation of the service.
D) taxed at a reduced rate if the revenue is to be used in keeping with the organization’s core
mission.
E) not taxed at all unless it is a religious organization.
78) A nonprofit organization may pay taxes if
A) excess revenues exceed 20 percent of the budget.
B) the organization is not considered to be a religious institution.
C) revenue is received from overseas subsidiaries.
D) revenue-generating holdings are not directly related to the organization’s core mission.
E) money is spent on research and development, then it is taxed at a significantly lower rate.