Perishability

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Description of Perishability. Explanation.

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Definition of Perishability. Description.

Perishability means something is subject to decay, spoilage, deterioration or destruction. In other words something cannot be regained when it is not used in time or when it is unsold. It is a lost economic opportunity. In management, the phenomenon can be used to describe the difference between goods, services and information.

Goods can be more or less perishable, they can have varying levels of perishability. Tomatoes are highly perishable, because their value deteriorates quickly. A diamond on the other hand is not perishable at all.
Services only have value when they are produced and consumed, so they are always perishable.
Information is on one hand non-perishable, because it does not deteriorate over time (permanence), although the medium in which it is stored may do so. But the value of information can vary with time, depending on the sort of information. Therefore information can be said to have a variety of levels of perishability, like goods, but unlike services.

Three more distinguishing characteristics of goods, services and information are (Freiden et al., '98):

Heterogeneity . The extent to which variations of something are possible or that all occurrences are identical to each other.
Inseparability. The physical and institutional distance between the originator of something and the final consumer.
Tangibility. The extent to which something can be seen, felt, heard or smelt using our senses.

Perishability forms the basis of Yield Management.