Frito-Lay uses aggregate planning to match capacity with demand because of the ________ associated with its specialized processes.
A) high variable cost and high fixed cost
B) high variable cost and low fixed cost
C) low variable cost and high fixed cost
D) low variable cost and low fixed cost
E) average variable cost and medium fixed cost

Question

Quizplus · Accepted Answer

Frito-Lay's specialized processes result in high fixed costs, such as equipment and facilities, but relatively low variable costs, such as raw materials and labor. Therefore, the most appropriate choice is C, which represents low variable cost and high fixed cost.

Frito-Lay Uses Aggregate Planning to Match Capacity with Demand Because