Absence of Inventory Buffer
Goods can be held in inventory,which is a buffer that dampens the impact on production activity of fluctuations in sales volume. Services cannot be stored. The airplane seat,hotel room, hospital operating room, or the hours of lawyers, physicians, scientists, and other professionals that are not used today are gone forever. Thus, although a manufacturing company can earn revenue in the future from products that are on hand today, a service company cannot do so. It must try to minimize its unused capacity.