18 Identify and explain two economies of scale from which Autovision could benefit. [4]

[BASEL Moderator]

Autovision is a private sector business based in Europe. It makes specialist glass for cars and benefits from economies of scale. Quality assurance is important to Autovision. The Operations Director has introduced new technology in recent years which has changed the production process. ‘It was expensive to buy, but we have 20 fewer workers than 3 years ago and can now make many different designs.’Autovision sells 50% of its products in Asia. The Operations Director thinks Autovision should relocate to Asia.

18 Identify and explain two economies of scale from which Autovision could benefit. [4]

Possible KN Points:
• Technical/invest large amounts in R&D
• Managerial
• Purchasing / bulk buying
• Financial
• Risk bearing