Managerial economies of scale case study
From: Brandon S. R.
Category: what kind
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Economies of scale mean the cost advantage of large scale production. They occur mostly in the long run when increasingly larger plants yield lower cost of production. Economies of scale arise when a business firm expands its scale of production, the unit cost of production decreases. If the unit cost increases while expanding the scale of production, it is called diseconomies of scale. If cost remains same for plant expansion, there is no economies of scale. At the initial level of production, the firm has increasing returns due to economies of scales and the average cost falls.
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Economies of Scale
Discussion Questions · Supply Chain Management Strategy, Planning and Operation 6th
Economies of scale are cost reductions that occur when companies increase production. The fixed costs , like administration, are spread over more units of production. Sometimes the company can negotiate to lower its variable costs as well. Governments, non-profits, and even individuals can also benefit from economies of scale. It occurs whenever an entity produces more, becomes more efficient, and lowers costs as a result. Economies of scale not only benefit the organization.
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Green Supply Chain Network Design with Economies of Scale and Environmental Concerns
Powered by GitBook. Discussion Questions. How could an auto manufacturer use transportation to increase the efficiency of its supply chain? How could a bicycle manufacturer increase responsiveness through its facilities? How could an industrial supplies distributor use information to increase its responsiveness?