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CS Professional · Strategic Management and Corporate Finance · Business Policy and Formulation of Functional Strategy

A Surat firm decides to produce a standard component in large batches on a dedicated assembly line to achieve the lowest unit cost, accepting limited product variety. Which production strategy emphasis does this reflect?

This reflects a cost-focused production strategy built on economies of scale and standardisation. Dedicated lines and large batches reduce unit cost, at the expense of variety. Customised or job-shop production would instead prioritise flexibility over low cost, and outsourcing is not mentioned.

  1. ACustomisation of each order to client specification
  2. BCost leadership through economies of scale and standardisationCorrect
  3. CJob-shop flexibility for one-off orders
  4. DOutsourcing of all manufacturing

Explanation

Large batches, a dedicated line and limited variety lower unit costs through scale and standardisation, which supports a cost-focused production strategy. Customisation and job-shop approaches sacrifice scale for flexibility, and nothing indicates outsourcing.

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