Operations Management (OM) is the systematic direction and control of the processes that transform inputs (labor, energy, materials, information) into finished goods or services. For the modern manager, OM is not a back-office function but a critical source of competitive advantage, determining the company's ability to compete on cost, quality, speed, and flexibility.
Posts tagged as “Diseconomies of Scale”
This is an economic principle where the average cost per unit of output decreases as the scale of production increases.
Scale of production means the size of the business operation. It refers to the volume or quantity of goods that a company or organization produces.
Operations Manager aims to produce goods and services of the required quality, in the required quantity, at the time needed and in the cost-effective way.
Business integrations including mergers, acquisitions and takeovers bring benefits such as synergy and higher market share, but may cause problems.
Because the costs of External Growth are considerably high, it means that Internal Growth is the only suitable method of growth for many firms on the market.
Diseconomies of scale that result from running a very large business organization can be avoided by using different approaches to management.
External diseconomies of scale are diseconomies of scale that occur within the industry (outside the firm) and are largely beyond an individual firm’s control.
Internal diseconomies of scale are diseconomies of scale that occur inside the firm and are within its control.