economies of scale
Bigness reduces costs
Economies of scale are the cost advantages that come from producing something in larger quantities.
When a factory makes more units, the cost per unit typically drops—fixed costs spread across more products, bulk materials cost less, and efficiency improves.
The company achieved economies of scale by expanding production.
The concept explains why large corporations can undercut smaller competitors on price.
Large-scale standardized fabrication
- factoryIndustrial production facility
- automationSelf-operating system design
- machineryCollective mechanical equipment
- roboticsAutomaton design field
plant · tooling · fabrication · just-in-time
Maximizing efficiency or performance
- streamliningMaking more aerodynamic or efficient
- productivityOutput relative to input
- throughputProcessing rate over time
- workflowSequential task progression
standardization · specialization · synergy · benchmarking · performance · input-output · integration
Increase in scope
- volumeAmount of space filled
- outputWhat something generates
- capacityMaximum amount containable
- enlargementIncrease in size
diversification · proliferation · accumulation · threshold · ramp-up · monopoly · oligopoly · conglomerate
Acquiring goods in volume
- overheadLocated directly above
- procurementObtaining goods externally
- wholesaleBulk sales to merchants
- discountsSubtractions from full price
negotiation · consolidation · centralization · outsourcing · break-even
mass-production
Large-scale standardized fabrication
- factoryIndustrial production facility
- automationSelf-operating system design
- machineryCollective mechanical equipment
robotics · plant · tooling · fabrication · just-in-time
optimization
Maximizing efficiency or performance
- streamliningMaking more aerodynamic or efficient
- productivityOutput relative to input
- throughputProcessing rate over time
workflow · standardization · specialization · synergy · benchmarking · performance · input-output · integration
expansion
Increase in scope
enlargement · diversification · proliferation · accumulation · threshold · ramp-up · monopoly · oligopoly · conglomerate · multinational
bulk-buying
Acquiring goods in volume
- overheadLocated directly above
- procurementObtaining goods externally
- wholesaleBulk sales to merchants
discounts · negotiation · consolidation · centralization · outsourcing · break-even
- business termsfranchising, revenue stream, board meeting, gross margin, markdown
- economicssupply and demand, inflation, GDP, GNP, gross domestic product
- efficiencyoptimization, efficient, streamlining, effective, optimize
- market economicsmonopoly, oligopoly, perfect competition, duopoly, monopsony
- supply chainsupply, supplier, delivering, suppliers, vendor
- cost cuttingcost cutting, budgeting, cost reduction, budget, budget cuts
economies of scalecustom work
Personalized, commissioned creation
cottage industry · handmade goods · made-to-order · premium pricing · customization
scale, economy, economic, economical, economics, scaling, economist, economists, economies