The Economy and Production below and respond to the questions. Businesses are confronted with economic challenges that pertain to the business cycle. During expansionary periods, businesses are pressured to increase the number of variable inputs (such as employees and raw materials) to meet short-term demand. At some point, however, a company must consider expanding other factors of production (such as equipment). Managers can use capacity planning to meet economic challenges during the business cycle.

What could be three operational (short-term) challenges that Jim will need to plan for?
Response:

b. What could be three strategic (long-term) decisions that Jim could make to increase the rate of output during a prolonged expansionary period.
Response: