Question

Blyrie Inc., a sports goods manufacturing company, follows a policy that involves manufacturing only when the demand exceeds the amount of goods already manufactured. Given this information, Blyrie Inc. most likely uses a _____ to expand its capacity.

Answer 1

B) capacity lag strategy

Step-by-step explanation:

A capacity lag strategy is generally very conservative and usually will only accept to increase capacity when the demand is higher than facility's total current capacity. It basically runs from behind and will try to use 100% of the current capacity before considering expanding it.

The problem with this approach is that many times in order to be able to use 100% of the current capacity you must incur in overtime costs which are higher than normal costs.

Answer 2

Complete/Correct Question:

Blyrie Inc., a sports goods manufacturing company, follows a policy that involves manufacturing only when the demand exceeds the amount of goods already manufactured. Given this information, Blyrie Inc. most likely uses a ________ to expand its capacity.

a. capacity straddle strategy

b. capacity reduction strategy

c. capacity lag strategy

d. capacity lead strategy

Answer:

C, capacity lag strategy

Step-by-step explanation:

In capacity planning of a manufacturing company, there are different strategies used by the company to determine the production capacity of the company as its production demand increases.

Capacity lag strategy is one of such strategies and it involves the increase in capacity of a production line when the production line is running at optimum conditions.

When the production line is working fully, the manufacturing company now has the opportunity to know by how much they need to increase efficiency and production to meet with the increasing demand.

Cheers.