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A manufacturing business is a cost leader in their industry - HSC - SSCE Business Studies - Question 10 - 2021 - Paper 1
Question 10
A manufacturing business is a cost leader in their industry. Which combination of features of the transformation process are they most likely to demonstrate? A. Lo... show full transcript
Worked Solution & Example Answer:A manufacturing business is a cost leader in their industry - HSC - SSCE Business Studies - Question 10 - 2021 - Paper 1
Step 1
Which combination of features of the transformation process are they most likely to demonstrate?
Answer
In identifying the appropriate features of the transformation process for a cost leader, we must consider the nature of their operational strategy. A cost leader typically focuses on efficiency and large-scale production to minimize costs. Therefore, the transformation process would generally entail a high volume of production with standardization, leading to lowered costs per unit.
In this context, high volume combined with low variety is characteristic of processes designed for mass production. This allows the business to produce a larger quantity of goods while maintaining lower operational costs.
Thus, the correct answer is:
B. High volume, low variety.