L6M9 practice question 7 of 15

Megan, the Director of Operations at Orange Windows Ltd, is concerned about overcapacity. Should she be worried?

Full set: 83 questions

Answer options

A: Yes - overcapacity means that the organisation has wasted resources Correct answer

B: Yes - overcapacity means that some customer orders may not be fulfilled

C: No - overcapacity means there are unused resources within the operations department

D: No - undercapacity will lead to unsold products

Correct Answer:

A. Yes - overcapacity means that the organisation has wasted resources

Explanation

Overcapacity means the organisation has more production than demand, leading to waste and inefficiency. Customer orders will still be fulfilled (eliminating option B). Under capacity (D) is incorrect, as overcapacity, not undercapacity, leads to excess stock. (LO 2.2, See p.115)

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