One of ValuTech's objectives for the year is to bring down the firm's production costs by 5 percent. To meet this objective, managers have suggested the following alternatives:
(1) Use alternate suppliers who can provide raw materials at a lower cost.
(2) Adopt cutting-edge technology that makes the production process more efficient.
-What is the underlying assumption in the second alternative?
A) Competitors are also likely to adopt high-end technology.
B) Consumers' purchase decisions are directly influenced by the manufacturing process.
C) The availability of better technology translates into higher worker productivity.
D) The costs associated with upgrading will outweigh the benefits.
E) Alternate suppliers can provide raw materials at a lower cost.

Question

Quizplus · Accepted Answer

The underlying assumption in the second alternative is that adopting new technology will increase worker productivity, which will ultimately lead to a reduction in production costs. This assumption is based on the idea that better technology will enable workers to produce more in less time and with fewer errors. Option A is not related to the assumption. Option B suggests that consumers' purchase decisions are directly influenced by the manufacturing process, which may or may not be true, but it is not relevant to the assumption. Option D is the opposite assumption of the second alternative, which suggests that the benefits of upgrading will outweigh the costs. Option E is the assumption of the first alternative.

One of ValuTech's Objectives for the Year Is to Bring