ALE topic 25

Using another business to undertake a part of the production process rather than within the business is called

When there is a short term excess capacity, below are the methods business could implement to improve capacity level except?

• Rationalization

• Switching to produce another product

• Labour contract based on hourly wages

• Keep high output level and store it up

Business operating with full capacity is desirable at all times.

• True

• False

When the current levels of demand are more than the full capacity output of a business is called...

What is the cause/ factor that lead to excess capacity in a business?

When capacity utilization is at a high rate, average fixed costs are usually...

• lower
• higher

• constant

• free

Explain how capacity utilization can be measured in a historical museum.

Draw an emoji to represent your thoughts on this topic.

A bakery can produce 1,000 loaves per day but is only producing 700. What is the main issue indicated by this level of capacity utilization?

• Overworked staff

• Underutilized resources

• Management control

• Customer unsatisfied

A restaurant with 80 seats experiences long wait-times every weekend because all seats are full. What method could BEST address this capacity shortage in the short term?

• Building a new dining room

• Increasing menu prices

• Extending opening hours

• Reducing staff shifts