What formal agreement specifies service levels and the terms under which a service is provided?

The correct answer is the Service Level Agreement (SLA). An SLA is a formal document that outlines the expected service levels between a service provider and a customer. It defines specific performance metrics, responsibilities, and the quality of service to be provided, such as response times, resolution times, and availability. This agreement serves as a benchmark for measuring the performance of the service and ensures that both parties understand their obligations and expectations regarding the service being delivered.

In the context of IT services, an SLA can also detail penalties or remedies in case the service levels are not met, further emphasizing its importance in managing the relationship between a service provider and its customers. By establishing clear terms and expectations, an SLA mitigates misunderstandings and helps maintain a positive working relationship.

Other options such as a Service Catalog, Service Operation, and Service Design do not serve the same purpose. The Service Catalog lists all services available to customers, but does not define specific service levels. Service Operation focuses on the delivery and support of services once they are up and running, while Service Design deals with the creation of services and their specifications before they are implemented. None of these options encapsulates the formal agreement aspect that specifically defines service levels in the same manner as an SLA does.