Question

Companies establish Time Fences in order to?

a) Limit the amount of time production planners have to create orders
b) Measure how long it takes to produce products
c) Minimize the impact of changes and costly disruptions

Answer 1

Companies establish Time Fences to minimize the impact of changes and costly disruptions in production, thus allowing them to manage production schedules, staffing, and operations effectively in both short-term and long-term scenarios.

Step-by-step explanation:

Time fences are established by companies for a very strategic reason. They serve to minimize the impact of changes and costly disruptions in the production process. Implementing time fences allows companies to create a buffer period during which certain aspects of the production schedule are fixed or limited in flexibility.

Companies face various decisions like whether to expand or reduce production, set the price they choose, open new factories or sales facilities or close them, hire workers or to lay them off, and start selling new products or stop selling existing ones. These decisions are impacted by market dynamics, and time fences help in managing these actions in a more controlled manner.

In the supply side of markets, while it is easier for producers to expand production over the long term of several years, short-term adjustments can be challenging. Time fences provide a structure within which these production, staffing, and operational adjustments can be made with reduced disruption and cost.