Asked by Susan Nguyen on Jul 17, 2024
Verified
When faced with uncertain conditions,it is always best to sign long-term contracts (because they are typically cheaper)and avoid all flexible capacity (because it is more expensive).
Flexible Capacity
Denotes the ability of a business or production system to adjust output levels or operations in response to changes in demand or market conditions.
- Assess the influence of demand and price uncertainty on supply chain strategies, including contracts and capacity decisions.
Verified Answer
TF
Tammy FournierJul 19, 2024
Final Answer :
False
Explanation :
When faced with uncertain conditions, it is actually better to have some flexibility and avoid long-term commitments that may become expensive if conditions change. Flexible capacity can help businesses adapt to changing circumstances, while long-term contracts can lock them into a fixed cost structure.
Learning Objectives
- Assess the influence of demand and price uncertainty on supply chain strategies, including contracts and capacity decisions.
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