In cases of constrained capacity,the opportunity cost of transferring a product internally is zero.

Question

Quizplus · Accepted Answer

In cases of constrained capacity, transferring a product internally still has an opportunity cost. The resources used for internal transfers could have been used to produce other products that could have generated revenue or profit. Therefore, there is always an opportunity cost associated with internal transfers, even in cases of constrained capacity.

In Cases of Constrained Capacity,the Opportunity Cost of Transferring a Product