Business – 9.3 Operations strategy – Flexibility and innovation | e-Consult
9.3 Operations strategy – Flexibility and innovation (1 questions)
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Flexibility in production volume allows a firm to respond quickly to changes in market demand, seasonal fluctuations, and unexpected orders, helping to avoid stock‑outs or excess inventory.
- Advantages
- Improved customer satisfaction through the ability to meet varying order sizes.
- Reduced carrying costs because inventory levels can be kept low.
- Disadvantages
- Higher operating costs due to the need for adaptable equipment, cross‑trained staff, and variable overtime.
- Potential inefficiencies if the production line is constantly re‑configured, leading to lower overall productivity.