Gilmore Corporation Is Investigating the Possibility of Adopting a Lean

question 93

Multiple Choice

Gilmore Corporation is investigating the possibility of adopting a lean production philosophy in its manufacturing facilities.The plant manager has done a cost-benefit analysis and has found that the costs of the lean production program exceed the benefits by $115,000.You analyze the situation and make some adjustments to the cost estimates.After doing your analysis,you find that costs still outweigh benefits by less than 5%.Which might be a sound course of action?

• A)Consider dropping the plan.
• B)Look for ways to lessen costs.
• C)Re-evaluate the value of benefits.
• D)All of the above should be considered.

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Definitions:

Units Of Output

A quantifiable count of the products or goods produced by a company or an industry.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced, decreasing as more is produced.

Short Run

A time period in economics where at least one factor of production is fixed, limiting the ability of businesses to adjust to changing market conditions.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to market balance.