Question 3: Which of the following is NOT a type of cost of providing service?
Correct Answer: B. A customer leaving a line because it is too long
Explanation: The cost associated with a customer leaving a line because it is too long is not
typically considered a direct cost of providing a service. It is a consequence of poor service
quality or a bottleneck issue but does not directly represent a cost incurred by the service
provider.
Adding an additional server (Option A) and having standby personnel if the line gets long
(Option D) are direct costs related to providing the service, as they involve labor and resource
expenses.
Having an old machine available to accommodate backlogged orders (Option C) can also be
considered a cost of providing the service, as it relates to the maintenance and operation of
equipment required for service delivery.
Final solution
The correct answers are:
1.
C. Location analysis is the most important function to complete prior to inventory
management because it has a direct impact on inventory decisions.
2.
C. Heuristic is the term for a procedure or set of rules used as an alternative to
mathematical optimization.
3.
B. A customer leaving a line because it is too long is not a type of cost of providing
service.
