Question

Which one of the following represents the strongest signal that companies opting to build additional plant capacity in the upcoming decision found will likely struggle to avoid the extra costs of having unneeded plant capacity and/or excessivily large year-end inventories of unsold brand footwear?

A. There is less plant capacity in Europe-Africa than any other geographic region and more plant capacity in the Asia-Pacific than any other geographic region
B. No companies stocked out of inventory in any of the four geographic regions in the most recent decision round.
C. The demand forecast in the FIR indicates that the combined demand for branded footwear and private-label footwear over the next three years will be 20% below existing amount of production capacity (not including any use of overtime)
D. At least 2 companies have built new plant capacity in each of the past three decision rounds.
E. More than half of the industry's plant capacity is currently located in the Asia-Pacific region

Answer 1

Step-by-step explanation:

Answer c. SInce the demand will be less, there will be either waste of excess capacity or storage of unnecessary inventory.