What does the term “facilities and equipment” encompass in relation to internal factors?

The term "facilities and equipment" refers specifically to the physical resources that an organization uses to produce goods or deliver services. This concept includes aspects such as buildings, machinery, tools, and the overall state of these resources.

Maintenance costs and age are crucial when discussing facilities and equipment because they directly impact the efficiency, productivity, and reliability of operations. Older equipment may require more frequent maintenance, potentially increasing costs and downtime, while well-maintained facilities and equipment can enhance operational performance and reduce unexpected failures. Understanding these factors is essential for effective operations management as they influence the overall productivity and capacity of an organization.

The other options relate to different aspects of business operations. Skills and expertise of the workforce focus on human resources, cash flow and debt concern financial aspects, and loyalty and needs of customers deal with market dynamics and customer relationships. While all these factors are important in the context of operations management, they do not directly pertain to the physical resources captured by the term "facilities and equipment."