Service Perishability - Meaning, Importance & Example
Published by MBA Skool Team, Last Updated: September 10, 2021
What is Service Perishability?
Service Perishability is a concept which says that services cannot be stored in inventory for future use or sale hence it can never get perished. It also implies that the service cannot be returned or refunded once they are delivered. It may be refunded or returned in case it is still not used in certain cases e.g. a prepaid calling card. If not used, it may still be returned but once the call is made using the balance, it perishes.
This aspect of service differentiates it from products which can be stored easily in inventory and can sustain through time. A retail store can keep the items in the shop even though it doesn't work for a week but a gym will lose business as it does not sell the equipment but it sells the service of using the equipment. The planning and forecasting becomes very important in wake of service perishability. A lot of costs can be saved if proper planning is done keeping the perishability aspect in mind. A restaurant which sees seasonality impact can either order more or less ingredients and produce as compared to normal days so as to avoid any wastage or loss as the service of selling food would go unused in case customers don't come.
Service Perishability Example
Doctors provide service to the patients, if the clinic is closed for a week the service can be rendered to the customers the next week whereas in case of a restaurant if it is closed for a week the same food cannot be served the next week because of the perishability issue.
Hence, this concludes the definition of Service Perishability along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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