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Please answer each question with a 3-4 sentence paragraph.
Name ten US companies with Economies of Scale; identify the mode(s) utilized for delivery to the customer by one of the named companies; and explain why the mode(s) may be most efficient based on its geography(ies).
šEconomies of Scale provides for a large group of nearby customers, so that businesses can produce at an efficient economy of scale; provides a large group of workers and suppliers; hire easily and purchase whatever specialized inputs they need.
MY EXAMPLE: Exxon – road, rail, water, pipeline- From point A to B allows for distribution to or from the source which may be imported or exported. Based on the different geographies of oil reserves, the resource may come from sea or land…the cost efficiency is based on standardized and traditional methods.
Name five industrial cities that benefit from Economies of Density; and provide the transportation mode that has cost savings for the Economy of Density.
šEconomies of Density provides cost savings resulting from spatial proximity of suppliers or providers; the total cost to transport units of freight from their points of departure to their intended destinations decreases by increasing utilization of existing vehicle fleet and infrastructure capacity within a market area of given size.,,
MY EXAMPLE: Houston – Crawfish – Road Mode
Provide five (5) examples of an Economy of Scope:
šEconomies of Scope is an economic theory stating that average total cost of production decreases because of increasing the number of different goods produced.
EXAMPLES: a gas station that sells gasoline can sell soda, milk, baked goods, etc.
…once a firm is producing soft drinks, it can use its marketing and distribution network to start producing alcoholic drinks.
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