Hayes and Wheelwright Argued That It Is Profitable for Firms

question 21

Essay

Hayes and Wheelwright argued that it is profitable for firms to operate along the diagonal of the product-process matrix.Justify the reason surrounding their argument.Can you think of situations wherein firms could move away from the diagonal and yet remain profitable?

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Definitions:

Interest

The cost of borrowing money or the payment received for lending money, typically expressed as an annual percentage rate.

Principal Repayment

The process of paying back the original amount borrowed from a lender, excluding interests.

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its interest obligations from its operating income.

Bonds Payable

Long-term liabilities representing money owed by a company to bondholders, to be repaid at a future date.