Capacity Allocation Decisions Have a Significant Impact on Supply Chain

question 33

Multiple Choice

Capacity allocation decisions have a significant impact on supply chain performance because

• A) capacity decisions tend to be permanent.
• B) capacity decisions tend to be changed frequently.
• C) capacity decisions do not tend to stay in place for several years.
• D) capacity decisions tend to stay in place for several years.
• E) none of the above

---

Definitions:

Variable Input

An input in the production process that can be varied in the short term to adjust output, such as labor or raw materials.

Profit-maximizing

The process or strategy by which a firm determines the price and output level that returns the greatest profit.

Output

The total amount of goods or services produced by a firm, industry, or economy in a given period.

Marginal Wage Cost

The additional cost incurred by hiring an extra unit of labor, essentially the change in total wage cost from hiring one more employee.