11 IF PEOPLE GENERALLY DID NOT ACT ETHICALLY IN SETUP TIME. FIRST, R...

1-11 If people generally did not act ethically in

setup time. First, reduced setup time allows a

business, no one would trust anyone else and

people would be reluctant to enter into business

company to produce in smaller batches, which in

transactions. The result would be less funds raised

turn reduces the level of inventories. Second, re-

duced setup time allows a company to spend more

in capital markets, fewer goods and services avail-

able for sale, lower quality, and higher prices.

time producing goods and less time getting ready

to produce. Third, the ability to rapidly change

© The McGraw-Hill Companies, Inc., 2006.

Solutions Manual, Chapter 1

1