APICS Certified Supply Chain Professional (CSCP) — Question 207

Which of the following outcomes is most likely a result of allocating excess capacity to a supply chain facility?

Answer options

• A. Lower utilization which leads to higher cost
• B. Higher utilization which leads to higher cost
• C. Higher utilization which leads to lower cost
• D. Lower utilization which leads to lower cost

Correct answer: A

Explanation

Allocating excess capacity often results in lower utilization, as the facility is not operating at its optimal level, which in turn increases operational costs due to inefficiencies. The other options suggest scenarios where costs are either higher or lower with increased utilization, which does not accurately reflect the impact of excess capacity.