Which statement about costs is CORRECT?

The value proposition of a service describes the value that the service will create for a consumer. This value is co-created through a combination of the service's utility (what it does) and warranty (how well it does it), as well as the financial and non-financial impacts. A key component of this value is the removal or reduction of specific costs and risks for the consumer, which the service provider takes on. Therefore, the costs removed from the consumer are an integral part of the service's value proposition.

A. Service consumption involves the costs imposed on the consumer (e.g., price, training), not the costs that are removed from them.

B. Utility is the functionality offered by a service to meet a need ("fitness for purpose"), not the costs imposed on the consumer.

D. Warranty is the assurance that a service will meet agreed requirements ("fitness for use"), not the costs imposed on the consumer.

AXELOS. (2019). ITIL® Foundation

ITIL 4 edition. TSO (The Stationery Office).

Section 2.2.2

"Value

outcomes

costs

and risks

" states: "From the consumer’s perspective

there are two types of cost involved in a service relationship: a) the costs removed from the consumer by the service (a part of the value proposition)... b) the costs imposed on the consumer by the service (the costs of service consumption)." This directly supports option C and refutes option A.

Section 2.5.2

"Utility and warranty

" defines utility and warranty. These definitions focus on functionality and assurance

respectively

and do not include "costs imposed on the consumer

" which refutes options B and D.