Which of the Following Is Not One of the Ways

question 50

Multiple Choice

Which of the following is not one of the ways that a company can achieve a cost advantage by revamping its value chain?

• A) Cutting out distributors and dealers by selling direct to customers
• B) Replacing certain value chain activities with faster and cheaper online technology
• C) Increasing production capacity and then striving hard to operate at full capacity
• D) Relocating facilities so as to curb the need for shipping and handling activities
• E) Streamlining operations by eliminating low value-added or unnecessary work steps and activities

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Definitions:

Fixed Costs

Expenses that do not change with variations in the level of output or sales, such as rent, salaries, and insurance.

Variable Cost

Expenses that change in direct relation to production levels or sales figures.

Depreciation Expense

The methodical distribution of the expense of a physical asset throughout its expected lifespan.

Net Income

Net income is the total profit of a company after all expenses and taxes have been deducted from revenues, indicating the company's financial performance over a specific period.