Modern Economics & Management Forum

The business community in the service industry is generally unaware of operation cost management and lacks a technique for managing operation costs. The rising expenses of human resources, materials and equipment, rent, and real estate are among the most significant challenges in the service industry. This paper aimed to study the influencing factors of the benefits of operation cost management in the service industry in Shandong. The objectives of the study were: 1) To examine whether human resource costs affect the benefits of operation cost management in the service industry in Shandong; 2) To examine whether material and equipment costs affect the benefits of operation cost management in the service industry in Shandong; and 3) To examine whether rental costs affect the benefits of operation cost management in the service industry in Shandong. This study adopted the quantitative research method. In this study, a total of 378 questionnaires were distributed, with 325 valid questionnaires, and the validity rate was 85.97%. The population consisted of service industry companies in Shandong Province, including restaurants, retail, healthcare, education, and training businesses. Based on the target cost theory, this paper found that: 1) Human resource costs have a significant positive effect on the benefits of operation cost management in the service industry in Shandong; 2) Material and equipment costs have a significant positive effect on the benefits of operation cost management in the service industry in Shandong; and 3) Rental costs have a significant positive effect on the benefits of operation cost management in the service industry in Shandong. For recommendations, operation cost management in the service industry should focus on the following aspects: 1) Optimizing human resource costs; 2) Rationalizing material and equipment costs; 3) Improving rental costs.