Disadvantages of product layout - high overhead charges, Project Management

Disadvantages of Product Layout - High Overhead charges

Due to heavy investment, the overhead fixed charges also tend to be high. A decline in demand for the product will render the equipment overcapitalized with unused capacity adding to the higher overhead costs.

Unless the demand can be accurately forecast well into the future and production capacity created only sufficient to satisfy this demand, firm under product layout frequently find themselves burdened with high fixed charges incident to large unused capacity.

Posted Date: 1/11/2013 7:49:53 AM | Location : United States

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