In manufacturing, excess capacity can be used to A. do fewer setups, lengthen production runs, and drive down inventory costs. B. do fewer setups, shorten production runs, and drive down inventory costs. C. do more setups, lengthen production runs, and drive down inventory costs. D. do more setups, shorten production runs, and drive down inventory costs.

Question

Business

Demetrius Avila

17 June, 00:46

In manufacturing, excess capacity can be used to A. do fewer setups, lengthen production runs, and drive down inventory costs. B. do fewer setups, shorten production runs, and drive down inventory costs. C. do more setups, lengthen production runs, and drive down inventory costs. D. do more setups, shorten production runs, and drive down inventory costs.

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Answers (1)

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Brian Sheppard · Answer 1

In manufacturing, excess capacity can be used todo more setups, shorten production runs, and drive down inventory costs

Explanation:

Excess capacity refers to a situation where a firm is producing at a lower scale of output than it has been designed for. Context: It exists when marginal cost is less than average cost and it is still possible to decrease average (unit) cost by producing more goods and services