Which one of the following statements concerning supply options is best?
A) Subcontracting can help overcome short-term capacity shortages by offloading work on other producers.
B) Creating anticipation inventory increases customization and is particularly favored in the service industry.
C) Adjusting workforce levels is preferred when the workforce is skilled and the labor pool is small.
D) Using overtime capacity usually improves worker hourly productivity.

Question

Quizplus · Accepted Answer

Subcontracting can be a useful option to handle short-term capacity shortages as it allows work to be offloaded to other producers. This can help mitigate the impact of any capacity constraints that a firm may be facing. The other options listed (B, C, and D) are not necessarily always preferred and may not be suitable in all cases. For example, creating anticipation inventory may not work well in industries where customization is important, such as fashion or technology, and adjusting workforce levels may be difficult if the labor pool is already constrained. Additionally, using overtime capacity may not always lead to improved productivity, as workers may experience fatigue and reduced efficiency if working overtime for extended periods of time.

Which One of the Following Statements Concerning Supply Options Is