Five Dimensions Must Be Considered in Making Decisions on Process

question 11

Multiple Choice

Five dimensions must be considered in making decisions on process. Which one of the following correctly identifies all five major process decisions?

• A) capital intensity, resource flexibility, vertical integration, customer involvement, and process choice
• B) capital intensity, resource flexibility, facility location, vertical integration, and process choice
• C) product or service life cycle, capital intensity, vertical integration, process choice, and customer involvement
• D) capital intensity, process choice, inventory placement, resource flexibility, and customer involvement

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Definitions:

Average Total Cost

The total cost of production divided by the number of units produced, representing the per-unit cost of production.

Marginal Cost

Indicates the change in total production cost that arises when the quantity produced is increased by one unit.

Output

The overall production of goods and services by a business or the entire economy.

MC Curve

The Marginal Cost Curve, which shows the cost of producing one more unit of a good or service.