When demand exceeds capacity, all of the following are reasonable options for the firm except
A) operating overtime hours to meet the demand.
B) starting a second or third shift.
C) subcontracting part of the work to other producers.
D) turning away some long-time customers.
E) expanding the capacity of the current facility.

Question

Quizplus · Accepted Answer

Turning away long-time customers is not a reasonable option because it can lead to a loss of business and damage to the reputation of the firm. The other options, including operating overtime hours, starting a second or third shift, subcontracting work, and expanding capacity, are all viable solutions to address the issue of excess demand.

When Demand Exceeds Capacity, All of the Following Are Reasonable