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Friday, July 24, 2020 | History

2 edition of Specialised technology, economies of scale and the make-or-buy decision found in the catalog.

Specialised technology, economies of scale and the make-or-buy decision

Bruce R. Lyons

Specialised technology, economies of scale and the make-or-buy decision

evidence from UK engineering

by Bruce R. Lyons

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  • 27 Currently reading

Published by University of East Anglia, School of Economic and Social Studies in Norwich .
Written in English


Edition Notes

StatementBruce R. Lyons.
SeriesEconomic discussion paper series / University of East Anglia, School of Economic and Social Studies -- no.26, Economic discussion paper (University of East Anglia, School of Economic and Social Studies) -- no.26.
ID Numbers
Open LibraryOL13969463M

[2] B. Lyons, “Specialised Technology, Economies of Scale, and the Make-or-buy Decision: A Test of Transaction Cost Theory”, Journal of Economic Behaviour and Organization (), , {}. Reprinted in C. Menard (ed) The International Library of the New Institutional Economics vol.4, ch, (), Edward Elgar. Economies of scale of a company is when the production of the company grows, then less input costs are said to be achieved which is known as economies of scale. When the production unit increases, then the company has better chances to reduce their costs which incur handsome profits to the company. There are two types of economies of scale.

that economies of scale exist only up to a certain size of plant, which is known as the optimal plant s ize because with t his plant size all possible economies of scale are fully exploited. If a firm’s technology exhibits economies of scale, costs per unit will fall as the firm expands its production. If a firm’s technology exhibits diseconomies of scale, doubling the inputs leads to less than doubling of the output level. With constant returns, increasing the inputs leads to the same proportional increase in output.

  14 • Economics Primer: Basic Principles Figure P.3 shows an average cost function that exhibits economies of scale, disec-onomies of scale, and constant returns to scale. Output level Q9 is the smallest level of output at which economies of scale are exhausted and is thus known as the minimum efficient scale.   You can make your production or service processes more efficient by having each employee highly specialized in their part of the process. Instead of having 12 employees in charge of an entire service package, have 4 people specialize in the first third of the package, 4 in the middle third, and 4 in the last third. How to Achieve Economies.


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Specialised technology, economies of scale and the make-or-buy decision by Bruce R. Lyons Download PDF EPUB FB2

•Book calls this “increased productivity of variable inputs” •Economies of scale more likely when production is capital intensive •As markets increase in size, economies of scale enable specialization –Larger markets lead to specialized firms –Firm may switch to “in house” production due to economies of scale File Size: KB.

Example of Specialized Labor and Economies of Scale An assembly line for a manufacturing company provides a useful example of specialization leading to economies of scale.

Evidence is provided from a new dataset on inputs gathered from UK engineering firms. The probability of buying-in specialised inputs is higher if the production technology is non-specific, but only if there are economies of scale or scope.

Furthermore, the economies of scale/scope effect is much reduced in the presence of specific by:   External economies of scale can also be reaped if the industry lessens the burdens of costly inputs, by sharing technology or managerial expertise, for example.

The spillover effect can lead to. In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation (typically measured by the amount of output produced), with cost per unit of output decreasing with increasing scale.

At the basis of economies of scale there may be technical, statistical, organizational or related factors to the degree of market control. Jutta Treviranus, Linda Petty, in Clinician's Guide to Assistive Technology, Cost.

Although prices for standard systems have decreased significantly with the increased numbers in use, the same economies of scale do not apply to assistive technologies.

In fact, the cost of assistive peripherals or software frequently exceeds the cost of the computer system. Evidence is provided from a new dataset on inputs gathered from UK Specialised technology firms.

The probability of buying-in specialised inputs is higher if the production technology is non-specific, but only if there are economies of scale or scope.

Furthermore, the economies of scale/scope effect is much reduced in the presence of specific assets. In the make-or-buy decision, which of the following is a reason for MAKING an item. management can focus on its primary business b.

lower production cost c. inadequate capacity d. reduce inventory costs e. None of the above is a reason for making an item. Purpose: The aim of this study is to analyse factors that are related to make or buy decisions. Within this research, a tool is created for make or buy decision-making which can be used as a help.

External economies of scale can also be reaped if the firm or industry lessens the burden of costly inputs by sharing technology or managerial expertise.

This spillover effect can lead to the creation of standards within a firm or industry, which can save time and money. These economies are enjoyed because of the technical efficiency gained by the organizations.

The advanced technology enables an organization to produce a large number of goods in short time. Thus, production costs per unit falls leading to economies of scale. Marketing economies of scale. Human and physical assets become more specialised to a single use so economies of scale can be fully realised within the firm.

Uncertainty in the market increases. It becomes necessary to organise production without the need to consult, complete, or revise interim agreements.

In order to maintain leadership in its product offerings, which of the following make or buy decision(s) will a firm undertake. It will carry out the brand management function itself. It will do the customer service call centre function itself. Scale economies are commonplace in operations, yet because of analytical challenges, relatively little is known about how firms should compete in their presence.

This paper presents a model of competition between two firms that face scale economies; (i.e., each. technology selection process for urban planners and decision makers.

From a planning economies of scale render can be more specialised but economies of scale are lost. By enforcing land-use and zoning regulations, or by separating or pre-treating industrial discharges before they.

Moreover, 90% of the U.S populating lives within 15 miles of Wal-Mart store. These strategic geographic locations of Wal-Mart have assisted Wal-Mart to achieve very high volume and sales and generate economies of scale, as a result. IT Investments: Wal-Mart leverages IT capabilities to better understand and manage its operations.

HRM OUTRSOURCING:MAKE OR BUY DECESION 1. HRM OUTRSOURCING: MAKE OR BUY DECESION Presented By: Lia Borsha Gomes 2. Contents of presentation Outsourcing Four Stages Process Make or Buy Decision Five competitive force driving organizations to outsource HR activities Rationales for outsourcing Positive and negative outcomes of outsourcing Conclusion.

Better information for incumbents, lock-in, and demand- and supply-side economies of scale suggest that industry structure in high-technology industries will tend to be rather concentrated.

On the other hand, information technology can also reduce minimum efficient scale thereby relaxing barriers to entry. The decision to buy externally can lead to cost savings in internal manufacturing when a company can take advantage of the expertise, economies of scale and smoother production schedules of external suppliers (Chalos, ; Roodhooft and Warlop, ).

The “make-or-buy” decision has been the subject of much research in economics, beginning with the classic paper by Coase ().

The transactions cost theory (Williamson, ) explains the key roles of incomplete contracts and asset specificity in the make-or-buy decision while the property rights theory considers how. Description. International Economics, the best-selling textbook in the field, is written by two of the world's preeminent economists.

Both the real trade portion of the book and the monetary portion are divided into a core of chapters focused on theory, followed by chapters applying the theory to major policy questions, past and current.Economies of scale result from bulk discounts when purchasing large amounts of raw materials, specialized labor and equipment that increase efficiency, and the fact that an increase in production.It is important to stress once more that the scale economies determine the shape of the LRAC curve (the ‘scale curve’ as this is often called), while the position of this curve depends on external economies such as a change in technology (improvement in techniques) and changes of factor prices in the industry or the economy as a whole.