Which of the following is a factor that can affect the reject rates at a company's footwear production facilities?

• A. The price elasticity of demand for footwear
• B. The level of advertising expenditure
• C. The interest rate set by the central bank
• D. The quality of raw materials used in production

Answer: (D)

Verified step by step guidance

1. Understand the concept of reject rates in production: Reject rates refer to the proportion of products that fail to meet quality standards and are therefore discarded or reworked.
2. Identify factors that directly influence production quality: These include inputs like the quality of raw materials, machinery efficiency, and worker skill levels.
3. Analyze each option in the context of production quality: For example, price elasticity of demand affects sales and pricing strategy but not the physical quality of products.
4. Recognize that factors like advertising expenditure and central bank interest rates influence demand and financing costs, not the reject rates in production.
5. Conclude that the quality of raw materials directly impacts the likelihood of defects during production, making it a key factor affecting reject rates.