How Can a Capital-Intensive Company Achieve a Cost Advantage by Revamping

question 19

Multiple Choice

How can a capital-intensive company achieve a cost advantage by revamping its value chain?

• A)downsizing a direct sales force and utilizing distributors and dealers exclusively
• B)eliminating sales operations at the company's website
• C)via higher rates of capacity utilization to allow depreciation and other fixed costs to be spread over a larger unit volume, thereby lowering fixed costs per unit
• D)centralizing facilities and outsourcing shipping and handling activities
• E)expanding operations by eliminating low value-added or unnecessary work steps and activities

---

Definitions:

Production Costs

The expenses incurred in the process of creating a product or service, including materials, labor, and overhead.

Fixed Cost

Expenses that do not change with the level of production or sales.

Mud Statues

Sculptures or figurines crafted from mud, often associated with folk art or traditional decorations.

Workers

Individuals engaged in any form of employment, contributing labor to produce goods or provide services.