Which of the Following Is FALSE Regarding Capacity Expansion

question 8

Multiple Choice

Which of the following is FALSE regarding capacity expansion?

• A) "Average" capacity sometimes leads demand, sometimes lags it.
• B) If "lagging" capacity is chosen, excess demand can be met with overtime or subcontracting.
• C) Total cost comparisons are a rather direct method of comparing capacity alternatives.
• D) Capacity may only be added in large chunks.
• E) In manufacturing, excess capacity can be used to do more setups, shorten production runs, and drive down inventory costs.

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Definitions:

Direct Channel

A marketing path that involves no intermediaries between the producer and the consumer, allowing for direct business transactions.

Indirect Channel

An indirect channel is a path a product or service takes from the producer to the customer through intermediaries such as wholesalers, distributors, or retailers.

Marketing Channels

The set of intermediaries or pathways through which goods and services are distributed from producers to consumers.

Consumer Product

Goods produced and intended for use by consumers for personal, family, or household purposes.