Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. you are the cfo. you know that capacity utilizatio

You are the CFO. You know that capacity utilization is important. If long-term operating assets...

90.2K

Verified Solution

Question

Accounting

You are the CFO. You know that capacity utilization is important. If long-term operating assets are used inefficiently, the cost per unit produced is too high. Cost per unit does not relate solely to manufacturing products. It also applies to the cost of providing services and many other operating activities. However, if we purchase assets with little productive slack, our costs of production at peak levels can be excessive. Further, the company may be unable to service peak demand and risks losing customers. In response, the company might explore strategic alliances. These alliances can take many forms.

Some require a simple contract to use another company's manufacturing, service, or administrative capability for a fee.

Another type of alliance is a joint venture to share ownership of manufacturing or IT facilities. In this case, if demand can be coordinated with that of a partner, perhaps operating assets can be more effectively used.

As the chief financial officer, what thoughts do you have? Is one of these forms better than others all the time? Which factors would you consider in deciding on the form of a strategic alliance?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Find the second-degree Taylor polynomial of f(x)=ln(1+sinx) centered at x=0.

Basic Math
Q

A 2.0-m-tall basketball player is standing on the floor a distance d from the basket, as...

Physics
Q

Should children/youth who receive a diagnosis of a chronic illness be told the truth about their...

Psychology
Q

On June 30, 2018, Singleton Computers issued 6% stated rate bonds with a face amount of...

Accounting
Q

Question 3 Generally metals exist in Points 1 Osolid and liquid states 6 solid and...

Biology
Q

An engineer wants to know if producing metal bars using a new experimental treatment rather...

Statistics
Q

Find the volume of the region bounded above by the paraboloid z x y and...

Calculus
Q

Question Content Area When Wisconsin Corporation was formed on January 1, the corporate charter...

Accounting
Q

One-time items that increase or decrease earnings that will not have sustained impacts into the...

Accounting
Q

Peter Pan Corporation was organized on January 1, 2014. During 2014, Peter Pan had the...

Accounting
Q

Bobs Bistro produces party-sized hoagie sandwiches. For next year, Bobs Bistro predicts that 52,000 units...

Accounting
Q

3.4.57-BE Question An ordinary annuly pays 6.20% compounded monthly A) A person depos 1200 monthly...

Finance