Which of the following statements is TRUE regarding capacity resources?
A)Raw materials and supplies are examples of intermediate-term resources.
B)Long-term capacity usually varies directly with production levels.
C)Flexible resources are usually purchased to acquire intermediate-term capacity.
D)Long-term capacity resources are expensive and referred to as "committed" resources.

Question

Quizplus · Accepted Answer

Long-term capacity resources are expensive and are referred to as "committed" resources because they are purchased with the intent of providing capacity for the long term. Raw materials and supplies are short-term resources, while flexible resources are purchased to provide short-term capacity. Long-term capacity does not always vary directly with production levels because it may involve fixed assets like buildings and equipment that cannot be quickly adjusted.

Which of the Following Statements Is TRUE Regarding Capacity Resources