Crunchy Chips is a potato chip manufacturer. To produce the chips, Crunchy Chips needs to first peel and slice the potatoes and then fry them within two minutes of slicing to prevent browning. If Crunchy Chips is unable to fry the potatoes within two minutes, it must freeze the chips and later defrost them to fry them. Which of the following is true for Crunchy Chips?
A)Vertically integrating the slicing and frying process will increase production costs.
B)Crunchy Chips has no production technological interdependency.
C)Crunchy Chips has production technological interdependency.
D)Crunchy Chips faces a hold- up problem.

Question

Quizplus · Accepted Answer

Crunchy Chips has production technological interdependency. The need to fry the potatoes within two minutes of slicing to prevent browning creates a technological interdependency between the peeling/slicing and frying processes. This means that the timely completion of one process is crucial for the completion of the other process. If the potato slicing process is delayed, the frying process is also delayed, which can lead to decreased production efficiency and increased costs. As a result, Crunchy Chips needs to manage the timing of both processes carefully to ensure optimal production efficiency.

Crunchy Chips Is a Potato Chip Manufacturer