Risk and return have a positive relationship: the greater the risk, the greater the potential for profit or loss. Low levels of uncertainty (risk) are associated with low returns, while high levels of uncertainty (risk) are associated with high returns.
Higher risk enterprises often provide higher profits than lower risk ventures. This is because investors expect a bigger return for taking on more risk when investing.
A US T-Note, for example, is less risky than a corporate bond and will provide a return/yield of 2%. However, the corporate bond will be more hazardous, therefore to entice investors, a 6% yield will be offered to compensate them for assuming the increased risk.
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venues sometimes take a cut of merchandise revenue from concert dates, usually on a variable scale specified in contracts, which is sometimes called a ______ fee.
Venues sometimes take a cut of merchandise revenue from concert dates, usually on a variable scale specified in contracts, which is sometimes called a facilities fee.
What is the facilities fee?Facilities fee is the expenses charged by hospitals to cover their overhead- the funding needed to keep the lights on, machines running, and doors open.
People who receive outpatient care at hospital-owned buildings are charged a facility fee, in addition to treatment costs and fees charged, individually, by doctors. Patients are often shocked when they receive a bill that is much higher than they expected since the hospitals don't have to disclose the costs of facility fees beforehand.
One of the main ways patients face facility fees is through outpatient treatment in an emergency room.
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in a process-costing system when goods move from department to department, the accounting for such transfers is relatively simple under . a. fifo costing b. weighted-average costing c. operations costing d. standard costing
Each unit in a process-costing system consumes about the same amount of resources.
Process Costing System:
They are often included uniformly throughout the production process in process pricing. When a large number of similar products are manufactured, a process costing system accumulates expenses. In this situation, it is more efficient to gather costs for a large number of items and then distribute them among the various produced units. Since it is assumed that the price of each unit is much like the price of every other unit, tracking data at the individual unit level is not required.
Alternatives to the Process Costing System:If a process costing system does not work well with a company's cost accounting systems, there are two more systems to consider. The job costing method is intended to gather expenses for single units or small manufacturing batches. A hybrid costing approach, in which process costing is utilized part of the time and job costing is used the rest of the time, works well in production situations where some manufacturing is done in big batches and other work stages demand labor that is unique to individual units.
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activity-based management is focused on blank . multiple select question. reducing defects eliminating waste pricing decisions increasing processing time
The goals of activity-based management are to:
(a) decrease defects
(b) get rid of waste.
Activity Based Management: What is it?An advanced control system called activity-based management (ABM) concentrates management's attention on specific tasks with the aim of enhancing the value that customers receive and the profit that results from supplying that value.
The goal of activity-based management (ABM), a management strategy, is to effectively and efficiently manage employee activities in order to boost productivity, profitability, and organizational competitiveness. The planning, execution, and measurement of company activities are the main objectives of this strategy.
What does activity-based costing prioritize?The actions that drive up expenditures are the focus of ABC's concern. Activity-based costing also includes transaction-based drivers, such as the number of orders received, whereas traditional absorption costing tends to focus on volume-related drivers, such as labor hours.
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because people take into account all information available to them in forming their expectations of the price level ep, only changes in the money supply affect real gdp. changes in the money supply that are when prices were set do not have any real effects.
The distinction between the level of actual GDP and capability GDP is called the output hole. when the output gap is advantageous—whilst GDP is better than capability—the financial system is running above its sustainable potential and is in all likelihood to generate inflation.
Reducing hobby fees will purpose funding (I) to upward push, and hence mixture expenditure will upward thrust too, so for every given charge stage the aggregate demand curve will shift to the right leading to higher output and decrease unemployment.
The mixture call for curve tends to shift to the left while overall customer spending declines. 2 consumers might spend much less due to the fact the cost of dwelling is growing or due to the fact authorities' taxes have multiplied. consumers may also determine to spend much less and shop more in the event that they count on charges to rise in the destiny.
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Vanessa, an underwriter, is evaluating a CGL application for Taunton Publishing. Taunton publishes a weekly tabloid newspaper with articles about popular entertainment and political figures. It has a large readership. The newspaper owns and operates out of a new, single-story building in a complex of commercial buildings. The publishing equipment is computerized, state-of-the-art. The publisher sells through variety stores, grocery stores, and newsstands and it has no on-premises retail operation. Taunton does have outside sales staff that promote the publisher's newspaper among potential sales outlets and that solicit advertising. Which one of the following liability loss exposures would Vanessa probably consider to be Taunton's greatest?
Select one:
A. Premises liability for the publishing facility
B. Products liability for the newspapers that the organization sells
C. Personal and advertising injury for potential libel, slander, or copyright infringement
D. Operations liability for sales staff activities at vendors and advertisers
Personal and advertising injury for potential libel, slander, or copyright infringement
Commercial general liability insurance includes personal and advertising injury coverage, which defends your company from lawsuits involving alleged violations of the personal or intellectual property of third parties. Libel, defamation, and copyright infringement are all covered. Infringements on a person's or a company's personal or intellectual rights frequently result in personal and advertising harm. Libel, defamation, and copyright infringement are a few examples. Limits. A Personal and Advertising Injury limit, which is the maximum the insurer will pay for all losses assessed against any one person or business, applies to Coverage B. The policy's General Aggregate limit applies to any damages or settlements paid under Coverage B as well.
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FILL IN THE BLANK. As customization of services increases, _____ become(s) a bigger factor in the ability to provide high quality service to the customers.
The ability to provide customers with high-quality service is increasingly dependent on the professional judgment of the staff as service customization increases.
A product or service is said to be customized when it is changed to meet the preferences or needs of a person or organization. The phrase can customers customization also be used when something is altered for a particular purpose. In other words, we can employ it whether we are concentrating on clients or tasks.
Customization in the context of online advertising refers to the targeting of advertisements based on the location of the user, their identity, the customers websites they have visited recently, and possibly even their age, customization occupation, and socioeconomic status.
Targeted advertising is what advertisers seek. A business that sells lawnmowers, for instance, anticipates that its advertisements will appear on gardening websites rather than those for hairdressing or aviation.
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the table contains the monthly demand for soda cans for four students. if these four students make up the entire market, what is the total monthly market demand for soda at $1.50 per can? 148 cans 125 cans 45 cans 99 cans
The answer is 148 cans , if these four students make up the entire market, and the total monthly market demand for soda at $1.50 per can.
What does the word "market" mean to you?The exchange of goods and services occurs when buyers and sellers come into contact with one another, whether directly or through middlemen or institutions.
How does a market function?A market is a collection of consumers that can be divided into numerous categories based on a variety of factors. Age, income, occupation, gender, personality, amount of use, and lifestyle are just a few of the characteristics of consumers.
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start-up losses of a new business operation can generate immediate tax savings if the business is operated as a corporation (T/F).
(F)alse
The answer is false. If a new business operation is run as a corporation, start-up losses might result in immediate tax savings. 2. A C corporation's net operating losses may be carried back to lower its taxable income in earlier tax years.
In order to allow taxpayers to offset their gross income from lucrative years with losses from unprofitable years, NOL rules were created. The NOL regulations were implemented to mitigate the excessively severe effects of taxing corporate income solely on a yearly basis. A business is taxed on the profit it makes after deducting all permitted expenses from its income.
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A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $5,000 to start each quarter. Fill in the missing amounts. (Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign.)
Cost budgeting can be defined as a tool to estimate the costs or necessary efforts for projects, work packages or activities in project management
Calculation of missing data in 1st Quarter
Collections from customers = Total cash available - Cash balance beginning
= $71 - $6
= $65
Total disbursements = Total Cash available + Deficiency in cash
= $71 + $2
= $73
Selling and administrative expenses = Total disbursements - Purchase of inventory - Equipment Purchase - Dividends
= $73 - $35 - $8 - $2
= $28
Borrowings = $5 + Deficiency in cash
= $5 + $2
= $7
Calculation of missing data in 2nd Quarter
Deficiency in cash = Borrowings - Minimum cash balance
= $15 - $
= $10
Total Cash available = Total Disbursements - Deficiency in cash
= $85 - $10
= $75
Collections from customers = Total cash available - Cash balance beginning
= $75 - $5
= $70
Calculation of missing data in 3rd Quarter
Total Disbursement = Total Cash Available - Excess Cash
= $101 - $11
= $90
Purchase of inventory = Total disbursements - Selling and administrative expenses - Equipment Purchase - Dividends
= $90 - $30 - $10 - $2
= $48
Repayments = Excess Cash - Minimum Cash
= $11 - $5
= $6
Calculation of missing data in 4th Quarter
Collection from customer = Total Collection - Collection of 1st, 2nd and 3rd Quarter
= $323 - $65 - $70 - $96
= $92
Selling and administrative expense = Total Selling and admin. expense - Selling and admin. expense of 1st, 2nd and 3rd Quarter
= $113 - $28 - $30 - $30
= $25
Equipment Purchase = Total Equipment Purchase - Equipment Purchase of 1st, 2nd and 3rd quarter
= $36 - $8 - $8 - $10
= $10
This is how we can explain the cost balance for four quarters.
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the hawthorne studies showed that financial incentives are not necessarily the most important motivator for workers.A. TrueB. False
This statement is true. The Hawthorne Effect is when participants in an experiment try to alter or enhance their behaviour merely because it is being assessed or researched.
What is Hawthorne effect ?The Hawthorne effect is a form of reaction in which people alter a behaviour pattern in response to being aware of being watched. The impact was identified during study at the Hawthorne Western Electric facility, however other academics believe the accounts are fictitious.At the Hawthorne Works, a Western Electric facility in Cicero, Illinois, employees who produced electrical relays were a part of the original study. The illumination investigation was carried out between 1924 and 1927. Workers went through a series of lighting modifications, and it was claimed that productivity rose with practically every change in lighting. This proved to be untrue. A group of five women participated in the Elton Mayo study, which took place between 1928 and 1932, and involved a number of organisational adjustments. However, because of its weak methodology and lack of controls, this study did not allow for the drawing of any conclusive findings.To learn more about Hawthorne Effect refer :
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a layout is an arrangement based on the sequence of operations that is performed during the manufacturing of a good or delivery of a service.
A product layout is an arrangement based on sequence of operations that is performed during manufacturing of good or delivery of service.
What is product layout?A product layout, used in manufacturing engineering, describes a production system where the workstations and equipment are positioned along the line of production, much like with assembly lines. The majority of the time, a conveyor is used to move work units along a line—not necessarily a geometric line, but rather a group of connected work stations. Each of the work stations along the line just does a little bit of work. To use the product layout, the total amount of work that needs to be done must be able to be broken down into manageable chunks that can be delegated to each workstation. As a result of the small amounts of work that each work station performs, each station uses techniques and tools that are unique to the task at hand. Higher production rates may result from this.
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true or false: a monopolist can force a consumer to buy a quantity larger than that dictated at by the consumers demand curve (at a given price).
True a monopolist can force a consumer to buy a quantity larger than that dictated at by the consumers demand curve (at a given price).
A monopolistic competitive industry has minimal entry requirements, and decisions made by any one firm do not immediately affect those of its rivals. The price and marketing choices made by the rival companies serve as their points of differentiation.
To maximize profit or reduce losses, businesses try to create a certain quantity where marginal income and marginal cost are equal. New businesses will enter the market when established businesses are profitable. When all businesses eventually experience a loss, the demand curve and the marginal revenue curve change, and new businesses stop emerging.
In monopolistic competition, demand is very elastic and responsive to price fluctuations. For products like laundry detergent, consumers will switch brands based purely on price increases.
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roller coasters are popular attractions at amusement parks. a cart on a roller coaster approaches the highest point which statement best describes the energy of the roller coaster as it slows down while traveling to the top of
As the roller coaster climbs another hill, it slows down. Kinetic energy is converted into potential energy.
The coaster's potential energy when on a hill is converted to kinetic energy when the coaster accelerates down the hill. As the roller coaster climbs another hill, it slows down. Kinetic energy is converted into potential energy.
What energy does a roller coaster consume at each point?Kinetic energy is what makes an object move. Many vehicles convert potential energy into kinetic energy to move along tracks. As the engine pulls the car up, it stores a lot of potential energy. This is released when the roller coaster reaches the top.
What happens to the potential energy as the roller coaster approaches the highest point?At the highest point of the roller coaster (assuming no velocity), the object has maximum gravitational potential energy and no kinetic energy. As the object moves down, the gravitational potential energy begins to decrease and the kinetic energy increases.
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management observed that the initial phase of a multiphase implementation was behind schedule and over budget. prior to commencing with the next phase, an is auditor's primary suggestion for a postimplementation focus should be to:
Management observed that the initial phase of a multiphase implementation was behind schedule and over budget. prior to commencing with the next phase, an is auditor's primary suggestion for a postimplementation focus should be to review the impact of program changes made during the first phase on the remainder of the project.
A budget is a plan, often but not always a financial plan, for a specified period of time, usually a year or a month. Budgets can include expected sales and revenue volumes, resource counts including time, costs and expenses, environmental impacts such as greenhouse gas emissions, other impacts, assets, liabilities and cash flow.
Businesses, governments, families, and other organizations use budgets to express strategic business plans in measurable terms. A budget represents planned expenditures as well as recommendations on how to achieve them with resources.
The above question is incomplete, the complete question is-
Management observed that the initial phase of a multiphase implementation was behind schedule and over budget. Prior to commencing with the next phase, an IS auditor's PRIMARY suggestion for a postimplementation focus should be to:
A. assess whether the planned cost benefits are being measured, analyzed and reported.
B. review control balances and verify that the system is processing data accurately.
C. review the impact of program changes made during the first phase on the remainder of the project.
D. determine whether the system's objectives were achieved.
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b. determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt (i.e., maintaining the budget balance at its current value).
One possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt are;-
Increase government spending by $25 billion.
Increase taxes by $25 billion.
A central authority is the device or organization of human beings governing an organized network, usually a state. inside the case of its broad associative definition, government normally consists of legislature, govt, and judiciary.
A government is the gadget to manipulate a kingdom or network. The Columbia Encyclopedia defines government as "a system of social manipulate underneath which the right to make legal guidelines, and the right to enforce them, is vested in a selected institution in society".
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as in the case of merit pay, performance bonuses for rewarding individual performance are rolled into an employee's base pay.
as in the case of merit pay, performance bonuses for rewarding individual performance are rolled into an employee's base pay, this statement is completely false
Performance Bonuses
The correct way to refer to the concept as merit pay, performance bonuses reward individual performance, but bonuses are not rolled into base pay, in fact, the employee must re-earn them during each performance period, In some cases, the bonus is a one-time reward. Bonuses for individual performance can be extremely positive and offer a great structure for setting out what kind of behavior to reward.
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find the amount of income tax withheld from sun jung's monthly paycheck of $8,612.50 using the percentage method tables in exhibits 9-1 and 9-2 from your text. sun jung is single and claims 2 withholding allowances.
The total amount of tax allowance will be $ 1619.33
Explain the method step by step.
An income tax is a tax imposed on individuals or entities in respect of the income or profits earned by them.
Monthly paycheck = $8612.50
Allowance amount = $650
Taxable income = 8612.50 - 6590
= 7962.50
Tax = $ 1490.95 plus 28 % of above 7504
= 1490.95 + 28/100 x ( 7962.50 - 7504 )
= 1490.95 + 128.38
= $ 1619.33
Hence, the taxable amount would be $ 1619.33
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a. the terms social cost and external cost are synonyms. b. social cost is the sum of private and external costs. c. when the production of a good results in pollution, private and social costs are the same. d. when the production of a good results in pollution, private and social costs are different. e. pollution is an example of an external cost. f. wages are an example of an external cost. g. private costs are costs that the firm is not obligated to disclose to the public.
The statements that are true are option B, D and E, whereas the rest of the statements are false.
According to neoclassical economics, the social cost of a transaction is the sum of the private costs connected with it as well as the costs that consumers endure as a result of being exposed to it but not paying or being charged for it. It stands for the sum of both internal and external costs.Uncompensated social or environmental repercussions are referred to in economics as external costs (also known as externalities). For instance, when consumers purchase gas for a car, they do not pay for the expenses associated with burning that fuel, such as air pollution, but rather only for the costs associated with producing that fuel (an internal cost).Thus the statements that are true and false are given here.
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scarcity of a key resource or input into the production process
Scarcity reduces the producer's ability to manufacture a limitless number of goods, thus limiting output.
What is the production process?Producers may have to make the difficult decision of which product to prioritize for manufacture out of a variety of items using limited resources.
Overall, a lack of resources or manufacturing inputs results in a smaller number of goods or services available on the market, which has an impact on customers by forcing them to make difficult purchasing decisions.
Therefore, when something is scarce, more people want it than can be supplied.
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which of the following is a key to scm success? group of answer choices be future oriented listen to signals from telecommunications equipment and plan accordingly wean suppliers off traditional business practices make the sale to the manufacturers
The following is a key to scm success : listen to signals from telecommunications equipment and plan accordingly.
What is telecommunication?Telecommunication is one of the most important tool for business. It enables businesses to communicate effectively with their customers and provide a high level of customer service.Telecommunication is a key element in enabling employees to easily collaborate from anywhere, whether remote or onsite. Important telecommunication technologies are telegraph, telephone, radio, television, video telephony, satellite, closed computer networks and public Internet. Telecommunications technologies include wiring, wireless, switching, transmission, radio frequency, optical communications, media, and internet protocol networks. Workers in this sector may work as contractors or be part of large telecommunications companies. Key components of Telecommunication systems include: Signals, communication channels, communication networks. Today's telecommunication systems can transmit graphics, video, voice, and text.To learn more about telecommunication from the given link :
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What is the promotional objective of the introduction stage of the product life cycle?.
The first stage of a product's life cycle is the introduction stage because the product is new to the market, the promotional goal is to educate consumers in order to raise their level of awareness.
What is the product life cycle?A product's life cycle is divided into four stages: introduction, growth, and decline and maturity. Many items are still in their early stages of maturity. The product life cycle is crucial in marketing because it helps define and select product-specific tactics.
However, in every product's life cycle, the product eventually fades from the market.
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what is the minimum size septic tank for an apartment building with 11 one-bedroom units and 2 two-bedroom units? select one: a. 4,550gal b. 5,000gal c. 4,700gal d. 4,200gal e. 5,250gal clear my choice
Based on the standard size of the septic tank and the usage requirements, the minimum size septic tank for an apartment building with 11 one-bedroom units and 2 two-bedroom units is 5,250 gal.
What is a Septic TankSeptic Tank is a term that is used to describe the underwater sedimentation tank which is used for primary treatment of domestic wastewater and fecal material.
Usually, the Septic tank helps in the process of domestic wastewater and fecal material in biological anaerobic digestion or decomposition and remake into settleable solid or semi-solid sludge.
To determine the minimum size of the septic tank needed, the standard size required for a one-bedroom is 350 gal, while the size required for a 2 bedroom house is 700 gal.
Therefore, for one bedroom we have 11 × 350 gal = 3,850 gal.
For 2 bedroom house, 2 × 700 gals = 1400
Total is = 3850 + 1400 = 5,250 gal
Hence, in this case, it is concluded that the correct answer is minimum of 5,250 gal capacity of septic tank is needed
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When you type in sustainable travel, the website for g adventures appears first in the list. This is an example of.
When you type in sustainable travel, the website for g adventures appears first in the list. This is an example of search engine optimization
What is search engine optimization?Generally, The practice of enhancing the quality and quantity of internet traffic that originates from search engines and visits a website or a web page is referred to as search engine optimization (SE/O).
Instead of focusing on direct traffic or bought traffic, SE/O concentrates on organic traffic.
Search engine optimization (SE/O) is the process of modifying a website in order to improve its position on a search engine results page (SERP), thereby increasing the amount of traffic that the website receives.
The objective here is to get a ranking on the first page of Goo/gle's search results for key phrases that are important to the audience you're trying to reach.
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wes was a major league baseball pitcher who earned $10,000,000 for his 20 wins this year. sam was also a major league baseball pitcher before a career-ending injury caused by a negligent driver. sam sued the driver and collected $6,000,000 as compensation for lost estimated future income as a pitcher and $4,000,000 as punitive damages. a. do the amounts that wes and sam receive have the same effect on their gross income? yes b. enter the amount, if any, to be included in the gross income for wes and sam.
a). The amounts that wes and sam receive have no effect on their gross income.
b). Gross income for Wes is $10,000,000 and $4,000,000 for sam.
Gross income is the total of all incomes, salaries, profits, interest payments, rents, and other kinds of income for households and people before any deductions or taxes are applied. It differs from net income, which is calculated as gross income less any applicable taxes and other deductions.
Because Wes earns $10 million and Sam receives $4 million, the amount Wes and Sam receive does not have the same gross income.
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identify which model best fits the data - an exponential growth model, an exponential decay model, a gaussian model, a logistic growth model, or a logarithmic model. explain your reasoning and compare/contrast the model you chose with the others.
Model fine suits the data is an exponential increase model.
The required details for exponential growth model in given paragraph
Exponential increase is a manner that will increase amount over time. It happens whilst the instantaneous price of change (that is, the derivative) of a amount with appreciate to time is proportional to the amount itself. Described as a feature, a amount present process exponential increase is an exponential feature of time, that is, the variable representing time is the exponent (in assessment to different forms of increase, such as quadratic increase). If the regular of proportionality is negative, then the amount decreases over time, and is stated to be present process exponential decay instead.
In the case of a discrete domain of definition with same intervals, it's also called geometric increase or geometric decay for the reason that feature values shape a geometric progression.
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How schools can successfully partner with local businesses?.
Build a local advisory board, school administrators can plan and administer fundraising strategies with the aid of business skills.
How can businesses get involved in schools?Employers require workers that are competent and organised. Developing relationships with students promotes career decisions that will help businesses and support their efforts in hiring. Partnerships help schools by providing them with the human and financial resources they need to deliver high-quality education.School administrators can plan and administer fundraising strategies with the aid of business skills. Businesses can organise special dinners and events to raise money for a cause, and they can also contribute financially by making their own donations.Students can act as the go-betweens between the institution and the business partner; they can discuss what is happening in the classroom to give the institution some context and a human face.To learn more about business refer:
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A company sells its printers to customers in order to make a profit of 25%. calculate (i) the price a customer pay for s printer which the company bought for $1700 (ii) the price the company paid for a printer which was sold to a customer for $2500
When the profit margin of the company for selling a printer is 25%, then
A customer will pay $2125 for a printer that the company bought for $1700, and, The company pays $1875 for a printer that was sold to a customer for $2500.A profit margin can be referred to or considered as the difference between the selling price and cost price of a product. For the given information, the computation can be done as below,
(i)
Selling Price = Cost Price + Profit Margin
Selling Price = 1700 + 25%
Selling Price = $2125
(ii)
Cost Price = Selling Price - Profit Margin
Cost Price = 2500 - 25%
Cost Price = $1875
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true or false: firms can use strategic alliances to strengthen their competitive advantage when competing in battles to control industry standards.
Firms can use Strategic alliances to strengthen their competitive advantage when competing in battles to control industry standards is True
Define Strategic Aliiances.A strategic alliance is an agreement between two businesses to work on a beneficial project together while each company maintains its independence.
Compared to a joint venture, which sees two companies combine their resources to form a new company, the arrangement is simpler and less legally enforceable.
What makes strategic relationships crucial?With the use of strategic partnerships, a company may expand its customer base without spending more resources. Creating a strategic partnership gives a franchise firm the chance to expand its clientele and attract new prospective clients. Franchise businesses are continuously looking for fresh, innovative methods to achieve this.
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ind the accumulated value of an investment of $25,000 for 3 years at an interest rate of 6.5% if the money is a. compounded semiannually; b. compounded quarterly; c. compounded monthly d. compounded continuously. Round answers to the nearest cent.
If the money is a. compounded semiannually: 30288.68
b. compounded quarterly:30335.18
c. compounded monthly : 30366.79
d. compounded continuously: 30382.77
a) compounded semiannually, n= 2
A = p × ( 1 + r/n )^nt
A = 25000 × ( 1 + 0.065 / 2 ) ^2×3
A = 30288.68
b) compounded quarterly: n= 4
A = p × ( 1 + r/n )^nt
A = 25000 × ( 1 + 0.065 / 4 ) ^4×3
A = 30335.18
c) compounded monthly n = 12
A = 25000 × ( 1 + 0.065 / 12 ) ^12×3
A = 30366.79
d) compounded continuously
A = Pe^rt
A = 25000 ×e^0.065×3
A = 30382.77
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Facility exteriors and interiors are part of ______. A) the servicescape. B) disintermediation. C) the core service. D) the intangibles in a service
Facility exteriors and interiors are part of the servicescape. The correct answer would be option A.
Booms and Bitner created the Servicescape model to highlight the significance of the physical surroundings in which an operational plan takes place. The purpose of the servicescapes model is to describe how exactly people behave in service settings so that environments can be designed that do not support organizational objectives in terms of eliciting desired behavioral reactions. When customers enter a service or retail location, the service environment is the first component of the experience they get and is when they are most likely to make opinions about the quality of the service they will receive. The non-human components of the setting in which service encounters take place are referred to as the servicescape.
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