Question

True or false: According to some organizational critics, the potential for a service production system to operate at peak efficiency increases if there is less direct contact between customers and the system.

Answer 1

The statement is false; less customer contact does not guarantee increased efficiency in service production systems, as customer interaction can be crucial for service innovation and quality. Economies of scale contribute to efficiency when higher production leads to lower unit costs.

Step-by-step explanation:

The statement is false. Efficient operation of a service production system does not necessarily increase with less direct contact between customers and the system. In fact, customer interaction can be significant for delivering quality services and can drive improvements in productivity. For instance, open communication with customers allows a business to better understand customer needs, which can lead to effective service delivery and innovation. Economies of scale also play a role in achieving efficiency, where increased production leads to a lower cost per unit as seen in large retail stores like Costco or Walmart. However, the level of customer contact required can vary depending on the nature of the service and the industry.