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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Calculus
1.2K views

One 8-oz serving each of coffee, energy drink, and soda contains 201 mg of caffeine....

Electrical Engineering
1.2K views

plot a simulation diagram of how a mobile phone works

Statistics
1.2K views

Use the data on lettuce yields in Exercise 2.2. Treatment (lb N/acre) Head of lecture/plot 0 104 114 90 140 50 134 130 144 174 100 146 142 152 156 150 147 160 160 163 200 131 148 154 163 Compute the analysis...

Calculus
1.2K views

Graph the function and its inverse Include the domain restrictions 17 f x x 2...

Calculus
1.2K views

The height in feet of the tide t hours after midnight is modeled in the...

Algebra
1.2K views

Evaluate the expression 4 k for k 5 When k 5 4 k 0 Simplify...

Accounting
1.2K views

Norma, a nonresident alien, owns a winter house in Florida with an adjusted basis of...

Accounting
1.2K views

A department had the following information for the month: What are the equivalent units of...

Accounting
1.2K views

Answer the required a,b,c,d with explanation how you got calculations

Finance
1.2K views

3. Evaluating free cash flows and return on invested capital You are an industry analyst...

Finance
1.2K views

1. Calculate the Macaulay duration of a 4-year bond with a 7% semi-annual coupon that...

Accounting
1.2K views

Line 24 account type should be Expense, financial statement should be Profit and Loss