Question

If a company decides to help differentiate its branded footwear by offering buyers 500 models/styles to choose from, the company managers should evaluate the merits of trying to reduce the $14 million annual costs for production run setup costs associated with producing 500 models/styles at each plant by

Answer 1

The company manager should evaluate the merit of reducing the costs associated with the production of the 500 models by INSTITUTING PLANT UPGRADE OPTIONS B AND PERHAPS CONSOLIDATING THE PRODUCTION OF BRANDED FOOTWEAR IN JUST ONE PLANT. This will allow the company to incur only the payment of production run just once.