Chapter 6 MAN 4720

Diseconomies of scale often appear when a firm: - decides to use specialized production equipment - reduces its output - becomes too large and complex to manage efficiently - places too much emphasis on the minimum efficient scale.

- becomes too large and complex to manage efficiently

Managers can increase the perceived value of their firms' product or service offerings by focusing on: - strategic contributions - customer service - supply chains - salient costs

- customer service

The concept of a(n) _________ attempts to combine both learning effects and process improvements. - experience curve - minimum efficient scale - strategic implementation - technological innovation

- experience curve

The _______ is the range of output needed to minimize the cost/unit as much as possible - cube square rule - minimum efficient scale - diseconomies of scale - economies of scale

- minimum efficient scale

The 4 most important cost drivers are: - complement choices - learning curve effects - experience curve effects - diseconomies of scale - cost of input factors - economies of scale

cost of input factors, economies of scale, learning-curve effects, and experience-curve effects.

The 3 most salient value drivers that managers have at their disposal to improve a firm's strategic position are:

product features, customer service, and complements

What are input factors?

raw materials, capital, labor, and IT services

Describe the cube-square rule

the volume of a body, such as a pipe or tank, increases disproportionately more than its surface

A differentiation strategy is typically associated with _____ pricing. - premium - excessive - disadvantaged - virtual

- premium

Which capability is required to create superior product features? - r&d - sales - accounting - marketing

- r&d

Economies of ______ describe the savings that come from producing 2 or more outputs at least cost than producing each output individually, even though using the same resources and technology. - scale - scope - standard - advantage

- scope

In the learning curve, the _________ the learning curve, the more learning takes place - wider - steeper - linear - flatter

- steeper