Internal resources,such as the legal department,training department,information technology,tend to be under-utilized,leading to a death spiral,when:
A)managers may choose whether to purchase the service internally or externally
B)the internal pricing system seeks to recover sunk costs
C)managers may decide to reduce the quantity of services used
D)the internal pricing system utilizes full costs
E)all of the choices are correct

Question

Quizplus · Accepted Answer

When internal resources are under-utilized, it often results from a combination of factors: managers having the option to source services externally, internal pricing systems attempting to recover sunk or full costs, and decisions to reduce service usage. These factors can collectively lead to a "death spiral" where the internal service departments become increasingly less viable due to decreased demand and high cost recovery attempts.

Internal Resources,such as the Legal Department,training Department,information Technology,tend to Be