"If an Industry's Minimum Efficient Scale Is Between 2,000 and 4,000

question 102

Essay

"If an industry's minimum efficient scale is between 2,000 and 4,000 units of output, then a firm producing 2,000 units of output in that industry has a cost-saving advantage over another firm producing 4,000 units of output in the same industry." Do you agree or disagree? Explain.

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Definitions:

Outsourcing

The business practice of hiring external vendors to perform services or produce goods that were previously handled internally, often to reduce costs or focus on core competencies.

Benchmark Firms

Companies that are considered to be the best in their industry or category and whose practices are used as a standard or comparison in benchmarking studies.

Supply-Chain Performance

The assessment of how effectively and efficiently a supply chain operates, often measured by metrics such as delivery time, quality, and cost.

Bar Code

A machine-readable representation of information typically used for identifying and tracking items through a series of parallel lines and spaces.