Question

5.

1. Keeping in mind that short-term production decisions are mostly based on the relationship between operating (variable) costs and expected product prices, discuss some of the advantages that larger operation may have. What strategies might smaller operations use to remain competitive long-term?

Answer 1

Main advantages of large operation are:

1.A large producer can install up-to-date and expensive machinery and the result is that the production is very economical.he can also have his own repairing arrangement.

2.In a large concern there is greater scope for division of labor as every person can be put on job that he can best perform.

3.Also a large firm enjoys the economies of bulk buying in case of purchase of raw material;s and other accessories.

4.A large firm can afford to spend more on research and development as such investments will repay in long run.

5.A big concern can afford to spend more on advertisements and ultimately they bear fruit.

6.A large concern can get credit at much cheap rates.

Main strategies for small operations  to remain competitive are:

1.The small businesses should focus on their chosen market segment.To compete with big rivals they should focus on their basic consumers and should expand from there,

2.They should try to win over the customers by responding to their complaints,inquiries,ensuring your products are eco-friendly, offer better courier service etc...

3.Try to create space to deliver better experience to the customers and to exceed their expectations .Customer service should be given most importance.