Which of the Following Is FALSE Regarding Capacity Expansion

question 8

Multiple Choice

Which of the following is FALSE regarding capacity expansion?

• A) "Average" capacity sometimes leads demand, sometimes lags it.
• B) If "lagging" capacity is chosen, excess demand can be met with overtime or subcontracting.
• C) Total cost comparisons are a rather direct method of comparing capacity alternatives.
• D) Capacity may only be added in large chunks.
• E) In manufacturing, excess capacity can be used to do more setups, shorten production runs, and drive down inventory costs.

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Definitions:

Time-Consuming

Requiring a great deal of time to complete, often more than what is considered reasonable or necessary.

Negotiation/Mediation

A process where disputing parties come together to discuss their differences with the aim of reaching an agreement, with mediation involving a neutral third party to assist.

ADR

Alternative Dispute Resolution, a range of processes used to resolve conflicts outside of traditional court proceedings.

Court Adjudication

The legal process by which a judge reviews the evidence and arguments presented by the parties to make a formal decision or judgment.