Use the Process Flow Diagram to Determine Which of These

question 77

Multiple Choice

Use the process flow diagram to determine which of these events has the greatest net benefit.

• A)reducing the flow time at Station A from 8 to 7 minutes
• B)increasing the capacity at Station B to 12 units per hour
• C)increasing the capacity at Station C to 9 units per hour
• D)reducing the flow time at Station D from 6 to 5 minutes

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Definitions:

Average Total Cost

The cost of producing each unit, calculated by dividing the overall production expenses by the number of products made.

Marginal Cost

The added cost resulting from the manufacture of one more unit of a product or service.

Variable Input

A factor of production whose quantity can be changed easily and flexibly by a firm in the short run to adjust output levels.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it shows the variable cost per unit of output.