oAre intangible and more customized and less storable than most
oIntangibility: come through the form of customer satisfaction, pleasure,
or a feeling of safety.
oCustomization: services are designed towards the needs of the
oUnstorability: services such as hair cuts cannot be produced ahead of
time and then stored.
•It is a series of logical steps.
•Forecast: Estimate of future demand for both new and existing products.
•5 main categories of operation planning
1Capacity (Planning): the amount of a good that a firm can produce
under normal working conditions.
•Capacity Planning For Producing Goods: managers must decide
whether to create a large facility to create more goods, but this is all
depending on the future demand of the good.
•Capacity Planning For Producing Services: depends on the
Low Contact Processes: have inventory checklists, "to be
High Contact Processes: supermarkets will have lots of
cashiers on the days leading up to a big holiday, such as thanksgiving
Influenced by proximity to raw materials and markets,
availability of labor, energy and transportation.
•Industrial parks are a good advantage for a
company because many of them already have the necessary tools
to run a company.
Located near resource supplies, labour, customers, or
High Contact Services are placed in areas with large
•Ex. Mcdonalds and fast food restaurants open up
in malls, hospital cafeterias, museums.