Contrasts economies of scale and economies of scope

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Reference no: EM132275148

1. A company that experienced problems with its wholesalers decided to replace them by building warehousing facilities from which to distribute its products and to hire its own sales force. This strategy is called:

a. imitation

b. horizontal integration

c. substitution

d. vertical integration

2. Which of the following statements correctly compares/contrasts economies of scale and economies of scope?

a. Economies of scale result from the decline in the average cost of production per unit as volume increases-whereas economies of scope result from the decline in the average cost of production due to the sharing of resources across products and services.

b. Economies of scale result from the decline in the average cost of production as volume increases, whereas economies of scope result from the decline in the average cost of production due to the outsourcing of resources across products and services.

c. Economies of scope result from the decline in the aggregate cost of production as volume increases, whereas economies of scale result from the decline in the aggregate cost of production due to the outsourcing of resources across products and services.

d. Economies of scale result from the decline in the average cost of production as volume increases, whereas economies of scope result from the increase in the average cost of production due to the outsourcing of resources across products and services.

3. Which one of the following questions is a fundamental criterion for a strategy?

a. Will stakeholders be satisfied with the strategy?

b. Where should the organization compete?

c. Does the strategy address the key opportunities and constraints that the organization faces?

d. Will the organization be able to charge lower prices than its competitors?

4. The first unit of production takes 20 hours to produce and the learning rate is expected to be 90 percent. How long will it take to produce the fourth? unit?

a. Greater than 18.0 hours

b. Greater than 12.0 hours but less than or equal to 15.0 hours

c. Greater than 15.0 but less than or equal to 18.0 hours

d. Less than or equal to 12.0 hours

5. Which of the following commodities is produced by a continuous? process?

a. Steak sandwich

b. Iced tea

c. ?T-shirt

d. Flash drive

Reference no: EM132275148

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