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Long term Capacity ExpansionFor the purpose of expansion of the long term capacity of the term the firm may decide to adapt and one more of the followings.1.The firm may given a sub contract to some other company. The sub contractor may produce the goods for the main contractor. This will act as via for expanding the capacity of the firm.
2.In order to expand its capacity a firm may decide to acquire other companies facilities or the resources. In this case the capacity will be expanding for the firm itself to produce in the times to come. However the capacity is created by acquiring rather than producing resources.
3.Thirdly the firm may develop new sites construct buildings or buy equipment for the purpose of expanding its capacity. Here the capacity is created right from scratch for the company.
4.Also the firm may update or modify its existing facilities in orders to increase its capacity to produce.
5.Finally the firm may decide to restart its facilities that may be put on hold previously. The reactivation of stand by facilities is the going back to some higher facilities that were explored earlier by the firm.
advantages of simple regression method for cost estimation.
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