Suppose a Firm Has Decided to Break Its Departments Down

question 33

Multiple Choice

Suppose a firm has decided to break its departments down into smaller units. While this likely will help with __________ issues, it raises the possibility that poor decisions will result due to __________.

• A) economies of scope; suboptimization
• B) economies of scale; risk aversion
• C) span of control; suboptimization
• D) economies of scope; risk aversion
• E) economies of scale; economies of scope

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how spread out those values are from the mean.

Safety Stock

An additional quantity of an item held in inventory to reduce the risk that the item will be out of stock.

Service Level

A measure of the quality of service provided, often defined by the speed and reliability with which a service is delivered to customers.

Service Level

Service level is a measure of the quality of service provided by a company, often defined in terms of speed, reliability, and customer satisfaction.