Chapter 3.5: Characteristics of Manu & Service Businesses

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Characteristics of MANUFACTURING businesses

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- Tangible: goods are physical, they can be seen and touched
- Goods can be stored for later use
- Little customer involvement in the production process
- Production and consumption occur separately
- Goods tend to be standardized and mass produced
- Capital intensive production process
- Examples: manufacturing cars, bread, clothing

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Characteristics of SERVICE businesses

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- Intangible: Customers pay for the skill and expertise of the service provider
- Services cannot be stored
- High degree of customer involvement in production of service
- Production and consumption occur simultaneously
- Services are usually specialised to meet individual customers' needs
- Examples: haircut, transport, education

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Similarities between manufacturing and service providers

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- Both aim to produce high-quality products or services at the lowest cost

- Both utilize technology in operations systems.

- Both aim to optimize efficiency and effectiveness.

- Both deal with customers and suppliers