The Cost of a Capacity Shortage Is

question 90

Multiple Choice

The cost of a capacity shortage is

• A)the reduction in margin that results from having to go to a backup source.
• B)the margin that would have been generated if the capacity had been used for production.
• C)the productivity increase generated when the capacity is used for production.
• D)the sales potential of excess capacity kept in reserve for emergency production.

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Definitions:

Job Simplification

The process of breaking down tasks into their simplest forms to increase efficiency and reduce complexity.

Employee Turnover

The rate at which employees leave a company and are replaced by new employees, which can indicate company health and employee satisfaction.

Compensation System

A structured plan designed by organizations to pay employees, which may include wages, salaries, bonuses, and benefits.

Telecommuting

A work arrangement in which employees do not commute to a central place of work, often working from home or a location close to home.