What is / are the differences between the manufacturing sector and service sector?
1. While manufacturing sector is the wealth-producing sector, service sector is wealth consuming
2. While manufacturing sector produces tangible goods, service sector produces intangible goods
3. Stock and Inventory are essential features of manufacturing industries not service industry
4. Manufacturing Industry is labour intensive while service industry is NOT labour intensive
Choose the correct option from the codes given below:

Answer: [B] Only 1, 2 & 3

The key difference between service firms and manufacturers is the tangibility of their output. The output of a service firm, such as consultancy, training or maintenance, for example, is intangible. Manufacturers produce physical goods that customers can see and touch. Service firms, unlike manufacturers, do not hold inventory; they create a service when a client requires it. Manufacturers produce goods for stock, with inventory levels aligned to forecasts of market demand. Some manufacturers maintain minimum stock levels, relying on the accuracy of demand forecasts and their production capacity to meet demand on a just-in-time basis. Inventory also represents a cost for a manufacturing organization.

A service firm recruits people with specific knowledge and skills in the service disciplines that it offers. Service delivery is labor intensive and cannot be easily automated, although knowledge management systems enable a degree of knowledge capture and sharing. Manufacturers can automate many of  their production processes to reduce their labor requirements, although some manufacturing organizations are labor intensive, particularly in countries  where labor costs are low.

This question is a part of GKToday's Integrated IAS General Studies Module