If a product line is being evaluated to be discontinued, then the potential freed capacity is only relevant to the decision if it can be used for another purpose.

Question

Quizplus · Accepted Answer

If the potential freed capacity cannot be used for another purpose, then it is not relevant to the decision of discontinuing the product line. The decision should be based on the profitability of the product line and any associated costs, such as production and marketing expenses. However, if the freed capacity can be used for another profitable purpose, then it should be taken into consideration when making the decision.

If a Product Line Is Being Evaluated to Be Discontinued