Which option is not among the three capacity-expansion alternatives being considered?

• A. Build Large Plant
• B. Build Small Plant
• C. Subcontracting
• D. Expand existing facilities using an existing line

Answer: (D)

In capacity planning, you look for ways to raise the maximum output the operation can deliver. The common expansion options are adding new capacity by building facilities (either a large or a small plant) or increasing capacity through outsourcing production (subcontracting). Expanding existing facilities using an existing line, however, doesn’t raise the ceiling of how much you can produce per period; it just uses the current line more or runs it more efficiently, so the maximum capacity stays the same. That’s why this option isn’t considered a true capacity-expansion alternative.