Which one of the following statements concerning supply options is BEST?
A)Subcontracting can help overcome short-term capacity shortages by offloading work on other producers.
B)Creating anticipation inventory increases customization and is particularly favored in the service industry.
C)Adjusting workforce levels is preferred when the workforce is skilled and the labor pool is small.
D)Using overtime capacity usually improves worker hourly productivity.

Question

Quizplus · Accepted Answer

Subcontracting allows for work to be offloaded to other producers, which can help overcome short-term capacity shortages. This can be especially useful when production needs fluctuate and it is not economically feasible to maintain a constant level of internal capacity. Creating anticipation inventory (B) is not always desirable as it increases inventory costs and can lead to excess or obsolete inventory. Adjusting workforce levels (C) may not be preferred if the labor pool is limited or if the workforce requires specialized skills that are not easily replaceable. Using overtime capacity (D) may not necessarily improve worker productivity as it can lead to fatigue and burnout.

Which One of the Following Statements Concerning Supply Options Is