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You are starting a factory. Demand is as follows: Jan - Oct: 1 unit/month Nov: 4 units Dec: 10 units Which of the following machines do you buy?
The right answer is that it depends. The key metric is: Cost of production capacity/Cost of inventory. Chocolate is cheap relative to its production capacity, option 2 is likely best. Jewelry is expensive relative to its production capacity, option 3 is likely best.
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