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 alternate 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 given options are true. Adding flexibility in production facilities can be more expensive but may provide benefits such as being able to select the inputs with the lowest cost, which ultimately leads to lower production costs. Additionally, it is important to consider the net present value (NPV) of the different production configurations to determine the most financially viable way to build flexibility into the facilities.

Which of the Following Statements About the Option to Build