Which of the Following Is a Risk (Or Potential Pitfall)

question 48

Multiple Choice

Which of the following is a risk (or potential pitfall) of cost leadership?

• A)Cost cutting may lead to the loss of desirable features.
• B)Attempts to stay ahead of the competition may lead to gold plating.
• C)Cost differences increase as the market matures.
• D)Producers are more able to withstand increases in supplier costs.

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Definitions:

Holding Cost

The expenses associated with storing unsold inventory, including warehousing, insurance, depreciation, and opportunity costs.

Lot Size

The quantity of a particular product that is produced or purchased in a single batch.

Setup

The process of preparing or configuring equipment or a work area for a new production run or task, which can involve adjustments and changeovers.

Kanban Size

The quantity of work or materials designated to trigger production activities in the Kanban system, balancing inventory levels and throughput.