Using Computer Links to External Suppliers,the Chrysler Corporation Can Achieve

question 51

Multiple Choice

Using computer links to external suppliers,the Chrysler Corporation can achieve economies by obtaining more than 70 percent of its parts from the outside.____________________ make it possible for companies such as Cisco Systems and Dell Inc.to outsource their production to contract manufacturers such as Flextronics instead of making their products themselves.

• A) Information systems
• B) Divisionalized systems
• C) Entrepreneurial systems
• D) Knowledge systems

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Definitions:

Diseconomies of Scale

A condition in which a firm experiences an increase in average costs as it increases its output, due to factors such as inefficiencies or complexity.

Marginal Product

The change in total output that results from the employment of one additional unit of a resource.

Marginal Cost

Represents the change in total production costs resulting from making one additional unit of a product or service.

Economies of Scale

Advantages in cost that businesses gain from expanding their production scale, leading to a decrease in the average cost per unit produced as the operation size grows.