Question $4$ of $7$

This test: $7$ point$($s$)$ possible

This question: $1$ point$($s$)$ possible

Identify how changes in the external environment affect the OM strategy for a company. For instance, discuss what impact the following external factors might have on OM strategy:

a$)$ Major increases in oil prices.

b$)$ Water$-$ and air$-$quality legislation.

c$)$ Fewer young prospective employees entering the labour market.

d$)$ Inflation versus stable prices.

e$)$ Legislation moving health insurance from a pretax benefit to taxable income.

a$)$ Select all of the correct impacts that major increases in oil prices might have on OM strategy below.

A$.$ For the energy inefficient company, change in the competitive position.

B$.$ For the energy inefficient company, change in the cost structure, result in higher selling prices.

C$.$ For a producer with high energy costs, change in the cost structure, result in higher selling prices.

D$.$ For a producer with high energy costs, change in the competitive position.

b$)$ Select all of the correct impacts that water$-$ and air$-$quality legislation might have on OM strategy below.

A$.$ Difficulty in predicting both the cost of production and the market demand.

B$.$ Increasing production cost.

C$.$ Closing of numerous plants including paper mills and steel mills.

D$.$ Difficulty in using the specific technologies.

c$)$ Select all of the correct impacts that fewer young prospective employees entering the labour market might have on OM strategy below.

A$.$ High unemployment rates.

B$.$ Change in the income of employees in the lower pay classifications.

C$.$ Tighter job market.

D$.$ Added capital investment for new equipment or processes.

d$)$ Select all of the correct impacts that inflation versus stable prices might have on OM strategy below.

A$.$ The manufacturing process stabilizes.

B$.$ Change in the income of employees in the lower pay classifications.

C$.$ Difficultv in predictina both the cost of production and the market demand.