economies of scale, global supply chains, outsourcing, offshoring

Question 1

what is economies of scale?

Answer 1

increasing profits

producing larger output

overall average price to manufacture each product is lowered

Question 2

what are benefits of economies of scale?

Answer 2

raw products can be bought in bulk - cheaper

products made efficiently - less money spent on labour

large amounts hipped - reducing overall transport costs

Question 3

what is outsourcing?

Answer 3

hiring other companies to complete company tasks that are essential but not necessary for the company to do itself

time saving

Question 4

what is offshoring?

Answer 4

relocating a companies process abroad

communication systems, easier transport, ability to transfer money a lot of companies use this to minimise costs