Firms should maintain capacity utilization at 100% at all times to minimize costs:
A)Yes, this is the right approach
B)No, since in practice 100% utilization is already beyond normal practical utilization, and increases costs.
C)No: in practice this is not feasible, and leaves no room for contingencies
D)Both b and c above

Question

Quizplus · Accepted Answer

Maintaining 100% capacity utilization is not practical as it can lead to increased costs due to overuse of resources and leaves no room for handling unexpected situations or maintenance needs.

Firms Should Maintain Capacity Utilization at 100% at All Times