Final answer:
Group technology reduces setup times and associated costs by grouping similar parts, decreasing frequency of machine adjustments. A firm choosing production technology 3 due to its lowest total cost exemplifies the optimal use of machinery over labour.
Step-by-step explanation:
True. The statement that setup time and its associated cost can often be reduced by the use of group technology is indeed true. Group technology is a manufacturing practice that aggregates parts into groups, or families, based on similar processing requirements. This approach can lead to reduced setup times because machines can be preset or adjusted less frequently when moving between parts within the same family. Consequently, by minimizing the non-productive time and effort of changing setups, both setup times and costs can be significantly reduced. An example of this can be seen in a manufacturing firm selecting production technology 3, as it offers the lowest total cost when machine hours become cheaper. This strategic selection aligns with the concept of group technology, where an emphasis is placed on utilizing more machinery with less labour, drawing on the benefits of economies of scale and automation.