A Wait-And-See Capacity Strategy

question 110

Multiple Choice

A wait-and-see capacity strategy:

• A) involves small, frequent jumps in capacity.
• B) minimizes the chance of lost sales due to insufficient capacity.
• C) can result in economies of scale and a fast rate of learning, yielding reduced manufacturing costs.
• D) stays ahead of demand.

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Definitions:

Lockbox System

A service offered by banks to companies for the receipt of payment from customers, under which payments are sent directly to a location accessible by the bank.

Processing Float

The time difference between when a transaction is initiated and when the funds are available in the account, affecting the usable balance.

Commercial Paper

Commercial paper refers to short-term, unsecured promissory notes issued by companies to finance their short-term liabilities.

Marketable Securities

Financial instruments that can be easily converted into cash, typically with high liquidity and short maturity periods.