Sematech Is a Producer of Computer Chips

question 95

Multiple Choice

Sematech is a producer of computer chips. To gain an advantage over other computer chip makers, Sematech focuses on reducing its costs below all of its competitors and has aligned its value chain accordingly. Recently, several of Sematech's competitors have begun to reduce the company's competitive advantage. In response to this threat, Sematech has decided to add production capacity in an effort to lower costs.
-If Sematech's efforts to increase its production capacity resulted in increased complexity and an inability of managers to control and operate the firm efficiently, this would be an example of

• A) physical limits to efficient size.
• B) worker de-motivation.
• C) distance to markets and suppliers.
• D) managerial diseconomies.

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Definitions:

One-Year Rule

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