After many years of trying out different ideas, you decide to start a business making metal fire pits for your friends and neighbours backyards. Identify below the economies of scale EOS statements and the diseconomies of scale DOS as your operation continues to expand in this growing market.
(5 Marks)
◻ As you increase production your workers are increasingly receiving improper instruction from multiple supervisors on telling them which projects are the next in terms of importance. Often the employees must speak with higher levels of management to address these multiple requests.
◻ You have found that some of your left-over supplies can be used by your spouse for a complementary product to your fire pits.
◻ As you increase your production your workers get more comfortable with the equipment and complex processing skills that are required of them in the manufacturing process.
◻ You don’t have time to make all of your employees birthday cakes like you used to. They riss this and find it de-motivational.
◻ As you grow, you have access to volume discounts on metal for your fire pits, expanding your profit margin.
Leave a Reply