Question

Most computer manufacturers build the basic components of a system, have these components in storage, and then put final custom touches on the system when they receive a customer order. In this manner, they are able to take advantage of economies of scale while also customizing their product. This demonstrates the idea of a ____strategy.

Answer 1

The strategy is mass customization, which combines economies of scale with customized production to reduce costs and meet specific customer demands.

Step-by-step explanation:

The strategy that the student's question refers to is the mass customization strategy. This approach allows companies to reap the benefits of economies of scale by mass-producing standard components of a product while still being able to offer customized final products based on specific customer orders. Utilizing economies of scale means that as the quantity of output increases, the cost per unit decreases due to the spread of fixed costs over more units.

This is a common practice in computer manufacturing, where companies like Apple and others may design in one country, manufacture components in various countries, and then assemble them in yet another. This international collaboration allows companies to specialize in specific areas, take advantage of lower production costs globally, and provide competitive prices to customers.