Question

a manufacturer that wants to smooth out manufacturing peaks and valleys throughout the year in order to have more efficient production, would most likely use

Answer 1

A manufacturer that wants to smooth out manufacturing peaks and valleys throughout the year in order to have more efficient production would most likely use the least costly production technology and consider economies of scale.

Step-by-step explanation:

The manufacturer should choose production technology 3 since it has the lowest total cost. By utilizing cheaper machine hours, the manufacturer can expect to shift towards using more machines and less labor, leading to more efficient production.

In addition, the manufacturer should consider the concept of economies of scale. This refers to the situation where, as the quantity of output increases, the cost per unit decreases. A larger factory can produce at a lower average cost than a smaller factory.

Overall, by choosing the least costly production technology and considering economies of scale, the manufacturer can smooth out manufacturing peaks and valleys and achieve more efficient production.

Answer 2

To achieve more efficient production and smooth out peaks and valleys, a manufacturer should select the production technology with the lowest total cost. Production technology 3, which favors more machines and less labor, offers cost savings and efficiency. Additionally, manufacturers benefit from economies of scale, where increased output leads to lower costs per unit.

Step-by-step explanation:

Optimal Production Technology and Economies of Scale

When a manufacturer aims to smooth out manufacturing peaks and valleys, the goal is to achieve more efficient production. This often involves selecting a production technology that offers the lowest total cost while allowing for shifts in production methods. In this case, production technology 3 should be chosen, as it allows for the use of more machines and less labor, leading to a reduction in cost.

With lower machine hours, a manufacturer can leverage the benefits of economies of scale. Economies of scale refer to the cost advantage that arises with increased output, where the cost per unit decreases. This concept is particularly evident in large-scale operations, such as Costco or Walmart, where they can produce goods at a lower average cost than smaller entities. Large factories, benefiting from economies of scale, can produce more efficiently than smaller ones. Hence, by choosing the right production technology, the firm can increase output while reducing costs, demonstrating economies of scale.