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Why is it dangerous to justify capacity expansion using economies of scale?
A. It is far too specific to use as a basis for capacity decisions
B. It requires consideration of quality, dependability and flexibility
C. Because volume, capacity, and process considerations are looked at individually
D. Because the common notion that unit costs will decline for larger facilities due to size is not necessarily accurate
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There are currently three cashiers with dedicated lines (single channel system). The customer arrival rate for a line is 10/hr and the service rate is 12/hr. A newly hired manager decides to merge all the times to create a multichannel system.
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With the information he had at the time, illustrate what other alternatives could he have considered. Develop at least two of them.
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