In microeconomics, economies of scale are the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.
Often operational efficiency is also greater with increasing scale, leading to lower variable cost as well.
Economies of scale apply to a variety of organizational and business situations and at various levels, such as a business or manufacturing unit, plant or an entire enterprise. For example, a large manufacturing facility would be expected to have a lower cost per unit of output than a smaller facility, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer.
Some economies of scale, such as capital cost of manufacturing facilities and friction loss of transportation and industrial equipment, have a physical or engineering basis.
The economic concept dates back to Adam Smith and the idea of obtaining larger production returns through the use of division of labor.Diseconomies of scale are the opposite.
... to help small firms reap some of the benefits of scale and scope by collaborating in areas such as production technology, training, marketing, and health insurance ... 'The other option is to let small firms stay small, but help them reap at least some economies of scale and scope.
Campaign owners want economies of scale — however, countries often waste time and resources localizing campaigns. Building a planning process that brings global, regional, and country marketing teams together will help drive campaign adoption ... .
This was attributed to improved economies of scale and higher proportion of sales of Medtecs-branded products and personal protective equipment (PPEs), the medical equipment supplier said in a regulatory filing on Monday (March 1) ... She is also the sister of WilliamYang, who is deputy chairman, executive director and chief executive of the company.
This is important to enable transport operations to reach their desired economies of scale coming out of emerging shared common situational awareness for supply chain efficiency and visibility among actors within the self-organising ecosystem of maritime transport.
Nvidia is after a double bottom line in the AI chip market. Better performance and better economics. Arm's acquisition helps with the economies of scale in the data center and expands Nvidia's footprint to the edge ... .
Traditional fishskin crafts of China'sHezhe ethnic group are driving new business opportunities ... A xiaokang society, or a moderately prosperous society, has been the dream of Chinese people for thousands of years ... "Fishskin is as soft as that of any other animal. Its beautiful colors reflect the magnificence of the sunlight.
Even during those times of disease outbreak, there always emerged arguments about ‘economies of scale’ ... Should economies of scale and its attendant economic benefits be the sole or principal objective or is there any other way?.