Which One of the Following Statements About Process Management Is

question 117

Multiple Choice

Which one of the following statements about process management is BEST?

• A)When customization must be high,equipment should be general purpose,and employees need to perform a broader range of duties.
• B)The traditional relationship between capital intensity and resource flexibility is that if one is high,so is the other.
• C)Creating a more capital-intensive process tends to reduce the fixed cost and raise the variable unit cost.
• D)Economies of scope mean that a process should be devoted to a single product or service to achieve high volumes.

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Definitions:

Economic Order Quantity

The ideal order quantity a company should purchase to minimize its inventory costs including holding, shortage, and order costs.

Carrying Cost

This is the total cost of holding inventory, including storage, handling, insurance, and opportunity costs.

Fixed Cost

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance.

Variable Cost

Costs that change in proportion to the good or service that a business produces.