A Vehicle Manufacturer Makes Base Models Using a Large-Scale Production

question 65

Multiple Choice

A vehicle manufacturer makes base models using a large-scale production process.It also partners with small companies that help customize its vehicles,thus offering a wide range of packages involving a variety of chassis colors,upholstery designs,music systems,GPS devices,and passenger safety options.The company's approach to its service offering is an example of ______.

• A) mass customization
• B) mass standardization
• C) customization
• D) standardization

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Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Cost

Costs that change in proportion to the good or service that a business produces.

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Market Price

The current price at which a good or service can be bought or sold in a market, determined by the forces of supply and demand.