In a Make-Or-Buy Decision When There Are Alternative Uses for Capacity

question 92

True/False

In a make-or-buy decision when there are alternative uses for capacity, the opportunity cost of idle capacity is relevant.

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Definitions:

Implication

A conclusion that can be drawn from something, although it is not explicitly stated.

Prescription

Legal acquisition of rights through the continuous and habitual exercise of those rights over a lengthy period.

Reservation

The act of keeping something, such as a right or property, specifically withheld or protected from being given up or used.

Lien

A legal right or interest that a lender has in the borrower’s property, granted until a debt owed by the borrower is paid off.