Which of the following statements about the option to build flexibility into production facilities is true?
A)Typically, production flexibility is more expensive.
B)One should consider the NPV of alternative production configurations.
C)Production flexibility may be valuable by enabling the firm to choose the inputs with the lowest available costs.
D)All of the options are true.

Question

Quizplus · Accepted Answer

All of the options are true. Building flexibility into production facilities can be more expensive initially but may be valuable in the long run by allowing the firm to respond to changing market conditions or input costs. It is important to consider the NPV (net present value) of different production configurations to determine the best option for the firm. Having production flexibility can also allow the firm to choose the inputs with the lowest available costs, further enhancing its competitiveness.

Which of the Following Statements About the Option to Build