2-1 colli

respond in 150 words to  below
 
To mitigate the risk of power outages, I believe companies have a few options.
The first option could be to compare the income produced from the company’s various manufacturing plants. Based on the activity-based-costing approach, the plants with the highest net income, in relation to activity, theoretically may be using ‘the most out of’ the infrastructure of that building. This can mean that the location is the most valuable, but it also is aging at a faster rate. Because of aging infrastructure, power outages are a greater risk. The company should decide if the cost of investing in a new facility, and the following projected revenues, is worth mitigating the loss the company would incur if its most valuable facilities were to lose power on a regular basis.
If the company decides that the costs of building a new facility are not worth the investment, then they could decide on current facility improvements. Improvements may not eliminate all power-loss occurrences, but it may be less of a net-loss to the company than investing in a new facility. A new facility could potentially increase fixed costs, such as manufacturing overhead, to a level that would result in a net operating loss.

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