Question

3 a) Explain i) the meaning of economies of scale and its relationship to the presence of fixed costs in the firm: ii) economies of scope; iii) and learning curve or experience curve effects. (Note: Easier to explain i and it with clearly labelled figures as discussed in the class) b) What the relevance of above concepts to marketing strategy?

Answer 1

Answer performance measurement practical to identify the project should be ended for continued. Some o Te peatamana measurements are productivity measured, customer satisfaction, retom m en lestment * Productivity measures are the effective measures to determine whether to project helps to Increase on the overall productivity of company. by composing relevant data and analyse the performance of company before and after project war takon. & Return on Investment help to determine whether orginal cost of investment for undertaking project. was earned back or at went to loss ito company. It help to decide future of any poject en an organization. * The customer satisfaction can survey by - Effectiveness of project & whether it satisfy them.

Answer Economies of Scale: It as defined as poportionate saving that as enjoyed by organization, when it produce the product at high production Scale It helps in dividing the proportion of freed cost- to different no. of units and al fixed cost as. divided into nod units the cost of production of product falls. I. Economies of scope; indicates cast benefits that are obtained by firm when it produce two on more poducts and it fixed help en reduced Cast as he fired cost divided on production of two or more products. the learning cure! indicate more task es performed greater learning results an lever wastage & Efficiency Greater to the concepts I The concepts given above are important that focus of them help to reduce the averall cast of production and it can pan to customer on fam of decrease price and costomers attracted to products.