Question

Describe activities in your organization or other organizations that result in economies of scale and economies of scope. Explain the economic benefits of these activities for the organization.

Answer 1

A cattle feed was in interest of setting up of new plant, but understanding that the plant capacity can be expanded at lesser lost helped to produce more at reduced cost. So economies of scale was realised for producing more at lesser cost.

Benefits to the organization:

1. This activity helped to reduce the cost of setting of new plant which would have further increased cost.
2. Helps to gain competitive advantage against others because of reduced cost
3. Improves productivity of labor