Increased setup times equal increased work-in-process inventories.

Question

Quizplus · Accepted Answer

Longer setup times mean that production is halted and resources are not being utilized efficiently, which leads to the accumulation of work-in-process inventories. This is because items that are waiting to be processed are considered part of the work-in-process inventory until they are completed. Thus, the longer the setup time, the more products are waiting to be processed, which increases the work-in-process inventory.

Increased Setup Times Equal Increased Work-In-Process Inventories