Longer manufacturing cycle times results in ________.
A) lower revenues and higher inventory carrying costs
B) higher opportunity costs and low profit margins
C) lower opportunity costs and high profit margins
D) higher revenues and lower inventory carrying costs

Question

Quizplus · Accepted Answer

Longer manufacturing cycle times mean that products remain in inventory for a longer period, resulting in higher inventory carrying costs. Additionally, delayed delivery of products to customers can lead to lower revenues due to cancelled orders or dissatisfaction. This can further result in reduced profitability due to discounts offered to customers or higher costs incurred to expedite production to meet customer demand. Therefore, longer manufacturing cycle times generally result in lower revenues and higher inventory carrying costs.

Longer Manufacturing Cycle Times Results in ________