Final answer:
Physical goods can be differentiated from services in the operations management process by longer lead times and the ability to be inventoried (option 1). This contrast is due to the tangible nature of goods, which allows them to be stored and counted as inventory, unlike services.
Step-by-step explanation:
The question asks how physical goods can be differentiated from services in the operations management process. Looking at the options provided, the correct differentiation is that physical goods have longer lead times and they can be inventoried. This is in contrast to services, which cannot be stored and typically have shorter lead times because they are produced and consumed simultaneously.
Physical goods range from durable items like cars and refrigerators to nondurables like food and clothing. The value of goods can be seen in the physical items themselves, as well as in the associated technology and intellectual property, such as that which goes into making a computer function.
Businesses may have inventories of unsold goods, which can fluctuate based on consumer demand. If demand exceeds expectations, inventories tend to decrease; conversely, if sales are lower than expected, inventories can increase. Such physical inventories reflect a unique characteristic of goods as opposed to services.