Losses Caused by Downtime in the Production Process Are Considered

question 17

Multiple Choice

Losses caused by downtime in the production process are considered a(n) :

• A) external failure cost.
• B) prevention cost.
• C) appraisal cost.
• D) internal failure cost.

---

Definitions:

Economies of Scale

The cost advantage that arises with increased output of a product due to spreading fixed costs over more units of production.

Minimum Efficient Scale

The smallest level of production a firm can achieve while still taking full advantage of economies of scale regarding costs per unit.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, leading to a reduction in average costs with increased output.