Service firms offer intangible products; they do not have a supply chain.

• A. True
• B. False
• C. Not sure
• D. Only for intangible products

Answer: (B)

The concept being tested is that supply chains are not limited to physical goods; services also rely on coordinated networks of suppliers, information, people, and processes to deliver value. Even though a service is intangible, it still requires inputs (labor, equipment, facilities, data, materials), capacity planning, scheduling, procurement, and delivery coordination across multiple partners or locations. The service delivery process—from sourcing and provisioning the necessary resources to coordinating with customers—constitutes a service supply chain.

Examples help make this clear: a hospital must plan and source medical staff, equipment, and pharmaceuticals; a software-as-a-service company must manage data centers, developers, licenses, and customer support; a hotel must coordinate rooms, housekeeping, food service, and vendors. So saying service firms do not have a supply chain is incorrect.