Final answer:
Operating plans are falsely associated with long-run budgets; they are instead expressed through short-run action plans and budgets. Long-run planning involves longer-term considerations, such as adjusting production capacities, with no fixed costs, and not typically tied to operating plans. Diseconomies of scale can occur when a firm grows too large and becomes inefficient.
Step-by-step explanation:
The statement 'Operating plans are generally expressed through long-run budgets' is false. Operating plans, which outline the steps a business intends to take to achieve its strategic goals, are typically expressed through short-term action plans and accompanying budgets. These plans often encapsulate a one-year period, aligning with the fiscal year of the company. In contrast, long-run plans involve a period during which all costs are variable, and the firm has full flexibility to adjust its production capacity and processes. During the long run, a company may consider multiple scenarios involving building new facilities or investing in new technologies to achieve efficiency and adapt to changes in demand and the competitive environment. Additionally, the concept of the long run emphasizes the lack of fixed costs, as firms are not constrained by short-term contractual obligations or capacity limitations.
Despite the importance of long-term planning, especially in terms of strategic positioning and capital investments, businesses typically rely on more specific and actionable short-run operating plans and budgets to manage day-to-day operations and respond quickly to market changes. This approach allows for a detailed and focused management of resources in the immediate future.It is also important to consider diseconomies of scale which can arise in the long run when a firm or factory becomes too large to manage efficiently, leading to increased average costs.