There is a cost associated with postponement because the production cost using postponement is typically: a) higher than the production cost without it. b) lower than the producti... There is a cost associated with postponement because the production cost using postponement is typically: a) higher than the production cost without it. b) lower than the production cost without it. c) very stable. d) equal to the production cost without it.
Understand the Problem
The question is asking about the cost implications of using postponement in production. It asks how the production cost with postponement typically compares to the production cost without it.
Answer
lower than the production cost without it.
The final answer is lower than the production cost without it.
Answer for screen readers
The final answer is lower than the production cost without it.
More Information
Postponement is a business strategy that aims to delay the final differentiation of a product until customer demand is known. While it can increase costs in some areas, like potentially requiring more flexible production processes, it typically reduces overall production costs due to factors like decreased inventory holding costs and reduced risk of obsolescence.
Tips
A common mistake would be to assume higher costs because of the need for more flexible systems. However, the reduction in waste and inventory often outweighs these.
Sources
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