Why Can Justifying Capacity Expansion with Economies of Scale Be

question 8

Multiple Choice

Why can justifying capacity expansion with economies of scale be dangerous?

• A)It is far too specific to use as a basis for capacity decisions
• B)Because volume,capacity,and process considerations are looked at individually
• C)Because the common notion that unit costs will decline for larger facilities due to size is not necessarily accurate
• D)It requires consideration of quality,dependability,and flexibility

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Definitions:

Zero Defects

A quality management philosophy that aims for the minimization and elimination of defects in manufacturing processes and products.

Deming

Refers to W. Edwards Deming, an American engineer and statistician known for his work in quality management and his influential ideas in improving business processes.

Numerical Quotas

Specific numeric limits set for production, sales, or other business metrics that need to be achieved within a given timeframe.