Question

In a lean environment, it is possible for two or more conventional bills of material to be combined, therefore reducing the number of overall bills needed. This will likely be because_____

Answer 1

In a lean environment, combining multiple conventional bills of material reduces the overall number of bills needed. This is due to economies of scale, 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.

Step-by-step explanation:

In a lean environment, two or more conventional bills of material can be combined, reducing the number of overall bills needed. This is likely because of the concept of economies of scale. Economies of scale refer to the situation where as the quantity of output increases, the cost per unit decreases. In a larger factory, the average cost of production is lower than in a smaller factory.