Know-How Exchange : Student Questions

According to www.biocrawler
Perishability - Unsold service time is "lost", that is, it cannot be regained. It is a lost economic opportunity. For example a doctor that is booked for only two hours a day cannot later work those hours— she has lost her economic opportunity. Other service examples are airplane seats (once the plane departs, those empty seats cannot be sold), and theatre seats (sales end at a certain point).

Clothing is perishable because is it both seasonal and current. Styles change. Weather changes. Last season's clothing is no longer appropriate to wear, and has "perished".

From a customer point of view, perishability has little impact. When it does, it may be positive. Using the doctor example listed by Jay, if a doctor is only scheduled for 2 hours a day, a walk in customer is more likely to get immediate service (a positive thing).

From the service provider's point of view, perishability is very important. Unsold time is totally lost - never to be recovered. The service provider would benefit for selling that time for anything about their true variable cost.