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Question 311 - CSCP discussion

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A company that has selected the hybrid production method has multiple alternatives for the timing of activating and deactivating capacity. The inventory carrying costs and which of the following categories of costs would typically be relevant in the analysis of the alternatives?

A.
Strategic sourcing
Answers
A.
Strategic sourcing
B.
Capital tooling
Answers
B.
Capital tooling
C.
New employee training
Answers
C.
New employee training
D.
Fixed plant
Answers
D.
Fixed plant
Suggested answer: C

Explanation:

When a company uses a hybrid production method, it has to manage the timing of activating and deactivating capacity. This typically involves costs associated with changing production levels, which include inventory carrying costs and other costs such as new employee training. Training new employees is relevant because adjusting production capacity often means hiring or laying off staff, necessitating investment in training new hires to maintain productivity and quality.

Strategic sourcing (A) is more related to procurement rather than production capacity.

Capital tooling (B) is relevant for initial setup but not typically for ongoing adjustments in capacity.

Fixed plant (D) costs are generally stable and not directly influenced by the timing of capacity changes.

Jacobs, F. R., & Chase, R. B. (2018). Operations and Supply Chain Management. McGraw-Hill Education.

Stevenson, W. J. (2021). Operations Management. McGraw-Hill Education.

asked 16/09/2024
Serhan Azdiken
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