Q.5 Under capacity options the company decides to vary the production output by varying the time, workforce or outsourcing. What are the basic capacity options a company can choose to meet demand?
Ans : Capacity Options :
Capacity options allow planners to change supply by adjusting labor, inventory, and subcontracting.
1. Hire and lay off workers:
The extent to which operations are labor intensive determines the impact that changes in the workforce level will have on capacity. Of the cost involved in this option, hiring cost includes recruitment, screening, and training to bring new workers “up to speed.” And, quality may suffer. Some savings may occur if workers who have recently been laid off are rehired.
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