When management has excess capacity available to it in the short run, which of the following would be the best path to follow?
A)Consider ways to reduce its fixed costs.
B)Consider accepting special orders.
C)Consider outsourcing certain products.
D)Consider mixing its product offerings in a new way.

Question

Quizplus · Accepted Answer

When a company has excess capacity, accepting special orders is the best path to follow because it allows the company to increase its utilization of available resources without incurring additional fixed costs. This allows the company to generate more revenue and potentially improve its profitability in the short run. Considering ways to reduce fixed costs, outsourcing certain products, or mixing product offerings in a new way may be beneficial in the long run but will not address the immediate excess capacity issue.

When Management Has Excess Capacity Available to It in the Short