Which of the following is a characteristic of a facility with excess capacity?
A)Will likely be more efficient per unit of product it produces than one with a lot of unused capacity
B)Would be very inflexible and respond to wide swings in the demands placed on it
C)Would be considered a high utilization facility
D)Will have difficulty responding to demand fluctuations

Question

Quizplus · Accepted Answer

A facility with excess capacity will likely have a lower cost per unit of product produced because fixed costs are spread over more units. This can make it more efficient than a facility with a lot of unused capacity. B, C, and D are not characteristics of a facility with excess capacity.

Which of the Following Is a Characteristic of a Facility