economics of scale: the decision about relocating manufacturing operations to the United States, economics homework
Primary Task Response: Within the Discussion Board
area, write 150 words that respond to the following questions with
your thoughts, ideas, and comments. This will be the foundation for
future discussions by your classmates. Be substantive and clear, and use
examples to reinforce your ideas:
Additional Information: Because
the decision about relocating manufacturing operations to the United
States is so important, the board of directors at AutoEdge continues to
systematically discuss every aspect of the situation.
The following week, CEO Lester Scholl meets you for coffee to discuss next week’s board meeting.
“I’m hearing good things about you,” he says. “Ingrid and George tell me you’ve been very responsive and helpful.”
“That’s good to hear,” you say. “I’ve enjoyed working with them.”
“We’re
both busy, so I’ll get right to the point,” he says. “One of the main
objectives of any business is to be efficient. Without efficiency, the
company is essentially losing money. Am I right?”
“Absolutely,” you say.
“What
must AutoEdge do,” he says, “to obtain economies of scale with
production? How do we know that it has achieved economies of scale?
Conversely, how do we know if it is achieving diseconomies of scale?”
“That’s a good question,” you say. “I can understand why you ask.”
But before you can respond, Lester’s cell phone rings. After a minute, he ends the call and stands.
“I
have to get back to the office to handle an emergency,” he says. “Would
you send me an e-mail with an answer to my questions, please?”
“No problem,” you say. “I’ll get it to you before I leave work this afternoon.”
“I appreciate it,” he says. “Thanks.
