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Why build the worlds largest ship?

Why build the worlds largest ship?. Scale of production. You will be able to: Understand the advantages and disadvantages of growth Explain what economies of scale are Explain what diseconomies of scale are

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Why build the worlds largest ship?

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  1. Why build the worlds largest ship?

  2. Scale of production You will be able to: Understand the advantages and disadvantages of growth Explain what economies of scale are Explain what diseconomies of scale are You should be aware that a business chooses the right scale of production to gain appropriate economies of scale and minimise the diseconomies.

  3. Economies of Scale • Technical economies- large businesses can afford specialised machinery eg robots for car production. Also larger lorries can carry a lot more, but don’t cost a lot more o run compared with a van. • Specialist managers- large businesses can hire specialists who should improve efficiency eg accounts specialist • Bulk-buying or purchasing economies- bulk buy discounts, advertising costs shared over more products • Financial economies- more sources of finance available to larger businesses. Larger and cheaper loans available • Risk-bearing economies- large businesses can sell a range of products and so spread the risk of failure • Welfare economies- staff have more facilities in larger businesses

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