Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 1: Q. 5-1PE (page 128)

The level of capacity for which a process was designed

and at which it operates at minimum cost.

Short Answer

Expert verified

Best operating level.

Step by step solution

01

Best operating level

Thebest operating levelis the ability under which the system is built, as well as consequently the production capacity at which the overall price per unit is minimal.

02

How best operating level operates at minimum cost

Thebest operating levelfor such a facility is the highest production volume only with the lowest average price. Companies strive to operate as near to this value as possible. If demand is continuously higher than the optimum processing level, capacity is increased to bring costs closer to the best working level.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

What features in project management information systems can be used to resolve the over-allocation of project resources?

A diagram showing the activities that support a company’s strategy.

Here is a CPM network with activity times in weeks:


Suppose F could be shortened by two weeks and B by one week. How would this affect the completion date?

A manufacturing shop is designed to operate most efficiently at an output of 550 units per day. In the past month, the plant produced 490 units. What was its capacity utilization rate last month?

The purpose of value analysis/value engineering is to…………………
See all solutions

Recommended explanations on Business Studies Textbooks

Human Resources

Read Explanation

Change Management

Read Explanation

Business Operations

Read Explanation

Corporate Finance

Read Explanation

Managerial Economics

Read Explanation

Financial Performance

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free