Resource Mix and Economies of scale Flashcards Preview

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Flashcards in Resource Mix and Economies of scale Deck (14)
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1
Q

What is efficiency?

A

manufacturing products at an acceptable standard whilst reducing time and waste

2
Q

What are some methods to improve efficiency?

A
  • training
  • just in time supplies
  • kaizen
  • technology
  • motivation
  • better deals with suppliers
  • economies of scale
  • refine organisational structure
3
Q

What are economies of scale?

A

the efficiency gains from falling unit costs as output increases

4
Q

What are the 3 economies of scale?

A

1) Technical
2) Specialisation
3) Purchasing

5
Q

What is technical economies of scale?

A

use of specialist equipment or processes to boost productivity through investment which is eventually more cost efficient over time

6
Q

What is specialisation of workforce economies?

A

When workers has their own specialised staff instead of other businesses

7
Q

What is purchasing economies of scale?

A

Businesses that get a discount for buying large quantities from the suppliers lowering unit cost per unit.

8
Q

What are dis-economies of scale?

A

When a business grows so large that the value of cost per unit increases.

9
Q

What are the dis-economies of scale?

A

1) poor communication
2) lack of motivation
3) loss of direction and coordination

10
Q

What is poor communication dis-economies?

A

expansion creates issues with communication between departments = long chain of command.

11
Q

What is lack of motivation dis-economies?

A

more isolated and its harder for workers to feel appreciated

12
Q

What is loss of direction and coordination dis-economies?

A

Hard to ensure all the business have a clear goal across all departments since its hard for managers to supervisions.

13
Q

What is the labour and capital intensive?

A

labour intensive = production by humans

Capital intensive = production mainly by machines

14
Q

What are some factors to consider in the resource mix?

A
available funds
mass or niche market?
workforce
capacity utilisation
nature of product
skills of staff 
market share and position
quality
product design
demand and supply