Large Scale Production Business Definition

Top 13 Advantages of Large Scale Production

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Following are the merits of large scale production.

1. Economies in the cost of Production:

The large scale production reduces the cost of production to a considerable extent. In these industries power in the form of coal and electricity etc. is required in great quantities. The industrialist can purchase them at cheap rates which reduces the per unit expenditure. The production is made with the help of big machines. Therefore, products manufactured by big machines are generally sold at the cheap rate.

2. Division of Labour:

Large scale production is always associated with more and more division of labour because in these units machinery is used to a larger extent. Therefore, with the use of machinery per worker output increases and all the benefits which the division of labour provides are reaped automatically.

3. Able Organizers:

The large scale production requires the able and efficient organizers which requires the better remunerative facilities. It is possible only when the industries are running on large scale. On account of the able management that the cost of production is less and the quality of the product becomes superior.

4. Economies of Information:

Economies of information are the advantages of an industry derived from the publication of trade and technical journals and the research centres. Research and experiment are also centralized in a localized industry.

5. Specialization:

When an industry grows, it becomes possible to split up some of the processes which are taken up by special firms. For example, cotton mills can specialize in the production of sarees, shirting, clothes etc.

6. Economies of Buying and Selling:

Usually, a large scale concern needs the requisite things like, land, labour, raw-materials etc. in large quantities and at low rates. These concerns can procure the things at low rates when purchased in bulk quantity.

7. Use of By-Products:

In the large scale production, by-products can be used in a better form. For instance, glycine is produced out of the by-product of soap.

8. Advantages to Consumers:

Consumers are the great beneficiaries in case of large scale production. They get good articles at cheap prices and, thereby, the standard of living of the society is raised.

9. Cheap and Easy Loans:

The entrepreneur having large scale production can secure easy and cheap credit facilities. It is due to the reason that they enjoy credit and reputation in the market due to their fixed assets.

10. Ability to Bear Losses:

Every trade faces the periods of boom and depression. During the period of depression, the volume of trade decreases and the producers suffer losses. Since, the entrepreneur is operating on large scale; he can bear the losses easily.

11. Use of Machines:

The large scale production always makes use of machines. Therefore, there arise all the advantages of the use of machinery.

12. Standard Goods:

Production of standardized goods is always possible on account of large scale production. It is only a big car manufacturing company which can produce the standard car and its spare parts also.

13. Useful for Workers:

The large Scale production is useful for workers. They get higher salaries, good accommodations and many more facilities. As a result their efficiency improves.

Large Scale Production Business Definition

Source: https://www.yourarticlelibrary.com/production/top-13-advantages-of-large-scale-production/47513

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