Final answer:
The advantage of a product layout is that it has low work-in-process inventories, due to the efficient sequence of equipment and workstations. While this optimizes the production process for current products, it is less flexible to design changes or new products. Economies of scale can also be realized through this layout. Hence, option (b) is correct.
Step-by-step explanation:
One of the advantages of a product layout is that it has low work-in-process inventories. In a product layout, the production process is organized around the product, which means that equipment and workstations are arranged in a sequence that matches the production process.
This design leads to a mechanized work environment focused on producing identical products, thereby minimizing work-in-process inventory levels due to the efficient flow of materials and semi-finished products. However, accommodating a change in product design or new products may not be as flexible due to the specialized nature of the layout.
Structured design processes used in developing these layouts provide explicit frameworks for team decision-making and help ensure that design choices meet customer and stakeholder needs, along with maintaining the important attributes of the product.
Additionally, economies of scale can be achieved by optimizing the scale of production. As the quantity of output increases, the cost per unit goes down, which is advantageous for firms looking to maximize efficiency.