They are acquired from outside sources, where the terms of acquisition do not require any long-term commitment for any given amount of the resource. Thus, the organization is free to buy only the amount needed. As a result, the quantity of the resource supplied equals the quantity demanded. Material and energy are examples. There is no unused capacity for this category of resources, since the amount of resource used just equals the amount purchased.
Since the cost of the resources supplied as needed equals the cost of resource used,
The total cost of the resource increases as demand for the resource increases Thus, the cost of flexible is a variable cost.
They are acquired from outside sources, where the terms of acquisition do not require any long-term commitment for any given amount of the resource. Thus, the organization is free to buy only the amount needed. As a result, the quantity of the resource supplied equals the quantity demanded. Material and energy are examples. There is no unused capacity for this category of resources, since the amount of resource used just equals the amount purchased.Since the cost of the resources supplied as needed equals the cost of resource used, The total cost of the resource increases as demand for the resource increases Thus, the cost of flexible is a variable cost.
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