A company suddenly finds demand has increased to 140% of its previous capacity. It has been able to hire only a fraction of the employees previously…

The company needs to increase its production capacity rapidly to meet a sudden surge in demand, compounded by labor and inventory shortages. Hiring temporary workers (A) is a fast, flexible way to augment the workforce without the long-term commitment and training time of permanent staff. Subcontracting (C) allows the company to immediately leverage the existing capacity of another firm, providing a very quick way to increase output without internal capital investment. Both are standard short-term tactics for managing capacity constraints.

B. Building new facilities is a long-term strategic decision that takes years and is not a rapid solution.

D. Hiring and training new full-time employees is a slower process than hiring temporary workers or subcontracting.

1. Heizer, J., Render, B., & Munson, C. (2020). Operations Management: Sustainability and Supply Chain Management (13th ed.). Pearson. Chapter 7, Section "Capacity and Constraint Management," lists tactics for matching capacity to demand, identifying subcontracting and use of part-time/temporary workers as short-term options.

2. Stevenson, W. J. (2021). Operations Management (14th ed.). McGraw-Hill Education. Chapter 11, Section "Dealing with Variations," outlines demand and capacity options. Capacity options include hiring temporary workers and subcontracting as common methods to handle peak demand periods.

3. MIT OpenCourseWare. (2016). 15.762 Supply Chain Planning, Fall 2016. Lecture 2: Aggregate Planning. The lecture materials discuss various levers for managing supply and demand, categorizing subcontracting and temporary labor as short-term supply-side levers.