Question

Which of the following is an example of an efficient manufacturing technique?

Option 1: Increasing the amount of time to manufacture products
Option 2: Reducing product costs
Option 3: Increasing product reject rates
Option 4: Meeting customers' rigorous demand

Answer 1

The correct option is 2. Reducing product costs is an example of efficient manufacturing techniques, as it enhances efficiency by minimizing total costs. Production technology 3, which uses more machinery and less labor, often results in the lowest total costs when machine hours are cheaper, thus providing cost efficiency.

Step-by-step explanation:

In terms of efficient manufacturing techniques, Option 2: Reducing product costs is an example of such a technique. In a manufacturing context, efficiency is often characterized by the ability to reduce costs while maintaining or enhancing product quality and output. To achieve this, firms may employ different production technologies, choosing the one that minimizes total costs.

Looking at various production technologies, one might find that production technology 3 has the lowest total cost. This is particularly true when machine hours are less expensive than labor. By deploying machinery over labor, where feasible, a firm can reduce production costs, an action that reflects an efficiency increase in the manufacturing process.

Production technology 1 relies heavily on labor and less on machinery, whereas production technology 3 adopts the opposite approach with minimal labor and maximal usage of machinery. If the cost of labor increases, it would make sense for the firm to move towards more machinery-intensive production technology, further reducing the production costs, in response to the rise in labor costs.