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CMA Intermediate · Operations Management and Strategic Management · Introduction to Operations Management

A Coimbatore pump maker is deciding between two operations strategy choices. Which choice is most consistent with a strategy that prioritises low cost through high-volume standardised output?

A dedicated assembly line with specialised equipment and high utilisation best supports a low-cost, high-volume standardised strategy, since fixed costs are spread over many units. Job shops, small customised batches and large capacity cushions favour flexibility and raise unit cost.

  1. AJob-shop layout with skilled generalist workers and frequent customisation
  2. BDedicated assembly line with specialised equipment and high utilisationCorrect
  3. CSmall batches with quick changeovers to suit each customer's design
  4. DExcess capacity cushion kept to handle sudden custom orders

Explanation

Low cost through standardised high volume fits a dedicated, repetitive line with specialised equipment and high utilisation, which spreads fixed cost over many units. Job-shop and small-batch choices support flexibility and customisation at higher unit cost. A large capacity cushion lowers utilisation and raises cost per unit.

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