Which of the following is true about effective capacity?
A)It is limited for firms that manufacture multiple products because they have to retool their assembly lines for each product.
B)Firms that produce a highly standardized product have a low-effective capacity,as they produce only one product.
C)It is heavily influenced by the lead time for the product.
D)Effective capacity is usually higher for customized services than for standardized products.

Question

Quizplus · Accepted Answer

Effective capacity is limited for firms that manufacture multiple products because they have to retool their assembly lines for each product. This results in additional setup time and lower capacity utilization.

Which of the Following Is True About Effective Capacity