Asked by Peyton Tippens on Jun 24, 2024
Verified
Which of the following is false regarding capacity expansion?
A) "Average" capacity sometimes leads demand, sometimes lags it.
B) If "lagging" capacity is chosen, excess demand can be met with overtime or subcontracting.
C) Total cost comparisons are a rather direct method of comparing capacity alternatives.
D) Capacity may only be added in large chunks.
E) All of the above are true.
Capacity Expansion
The process of increasing the production capabilities of a facility or system to meet expected demand increases.
Total Cost Comparisons
The process of comparing the overall costs of different alternatives or options in order to make a decision that minimizes costs while achieving desired outcomes.
- Analyze how various capacity expansion strategies adjust in accordance with demand fluctuations.
Verified Answer
AK
Ayzen KenpachiJun 28, 2024
Final Answer :
D
Explanation :
Capacity may be added in small or large increments depending on the specific needs and resources of the organization. Adding capacity in small increments can be a more flexible and cost-effective approach.
Learning Objectives
- Analyze how various capacity expansion strategies adjust in accordance with demand fluctuations.
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