The capacity management approach where a firm builds facilities to produce a relatively stable output of products over time in a very efficient manner and facilities to produce a widely varying volume and variety of products,but at a higher unit cost is

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The use of dual facilities - dedicated and flexible - allows a firm to balance the efficiency of producing a stable output of products with the ability to accommodate varying volume and variety of products when necessary. This approach enables the firm to optimize its capacity utilization and minimize costs while still being able to respond to changes in demand.

The Capacity Management Approach Where a Firm Builds Facilities to Produce