The Costs and Revenues Associated with Two Alternatives Are Listed

question 74

Multiple Choice

The costs and revenues associated with two alternatives are listed below: $$\begin{array} { l r r } & \text { Alternative } 1 & \text { Alternative } 2 \\\text { Projected reveruse } & \$ 100,000 & \$ 125,000 \\\text { Unit-level costs } & 20,000 & 30,000 \\\text { Batch-level costs } & 20,000 & 25,000 \\\text { Product-level costs } & 15,000 & 15,000 \\\text { Facility-level costs } & 10,000 & 10,000\end{array}$$ Which alternative should be selected based on this information?

• A) Alternative 2 because it has a higher profit.
• B) Alternative 2 because it has the same product- and facility-level costs.
• C) Alternative 1 because it has fewer unit-level costs.
• D) Alternative 1 because it has a higher profit.

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Definitions:

Flexible Manufacturing

A system that allows for quick adjustments in production processes in response to changing market demands, trends, or technology.

Competitive Advantage

A unique attribute or capability that allows a company to outperform its competitors.

Excellent Service Technology

The deployment of sophisticated technology aimed at improving the quality and delivery of service operations, enhancing customer satisfaction.

High Production

High production refers to achieving a significantly elevated level of output or manufacturing of goods and services, usually associated with efficient processes and high productivity levels.