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Explain why extra capacity can be valuable

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Reference no: EM131644183

Question: In the original Grand Prix example, the total capacity of the three plants is 1550, well above the total customer demand. Would it help to have 100 more units of capacity at plant 1? What is the most Grand Prix would be willing to pay for this extra capacity? Answer the same questions for plant 2 and for plant 3. Explain why extra capacity can be valuable even though the company already has more total capacity than it requires.

Reference no: EM131644183

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