Lead Capacity Strategy Is a Reactive Approach That Adjusts Its

question 39

True/False

Lead Capacity Strategy is a reactive approach that adjusts its capacity in response to demand.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, indicating how much of the revenue contributes to covering fixed costs and generating profit.

Fixed Costs

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

Break-even Sales

The amount of revenue needed to cover both fixed and variable costs, resulting in zero net income or loss.

Variable Costs

Expenses that change in proportion to the activity or volume of production or sales, such as raw materials and direct labor.