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Is there a way economies of scale is going to cause me a loss in production? How?

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Question ajoutée par Dana Qaisi , Social Media Specialist , N/A
Date de publication: 2017/02/20
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par Utilisateur supprimé

Hi Dana, 

 

The answer is yes and no depending on your product mix. If you have a low product mix, like drink can manufacturing then the larger the production batch the more economic it is, the least downtime for changeovers and stoppages. 

 

Conversly, if you have a high product mix, you have many changeovers, to be economic the production run needs to be nine times the changeover time. (The runtime is 90% of the total time of runtime & changeover time). Economies of scale usually mean large plant / machinery with large changeover times. To satisfy customer requirements / stock you will be having short runs and more changeovers reducing process availability and losing production.