1. Do Now Answer the following.What would be the advantagesof adding more people to 5 minutesincrease utilisation?At what point might it causeproblems to keep addingpeople?What might these problems be?

2. Operational Strategies: Scale and resource mixCHAPTER 12

3. Learning ObjectivesBy the end of the lesson you should be able to:1. Identify the causes of economies and diseconomies of scale.2. Assess the importance of economies and diseconomies of scale3. Understand the advantages and disadvantages of capital and labour intensive resource mixes.

4. Scale of operation - economies and diseconomies of scale The size of an organisation will directly influence its ability to operate efficiently. The point at which a firm is operating at its most efficient is known as its optimum output and is at the point were the average cost of production is at its lowest. Before a firm reaches its optimum output, it will benefit from economies of scale as it grows, once optimum output is reached and exceeded further growth will start to cause problems, diseconomies of scale.LO1) Identify the causes of economies and diseconomies of scale.

5. Economies or diseconomies of scale how does it happen? Match the correct example to the following: Internal economies of scale External economies of scale Internal diseconomies of scale External diseconomies of scaleLO1) Identify the causes of economies and diseconomies of scale.

6. Which example of economies and diseconomies of scaleLO1) Identify the causes of economies and diseconomies of scale.

7. Test yourself - What have you learned about economies and diseconomies of scale? 1. Distinguish between economies and diseconomies of scale 2. What is meant by the term optimum level of output? 3. With the use of appropriate examples, explain how a chain of high street quality Indian restaurants may benefit from economies of scale. 4. With the use of appropriate examples, explain how a large distribution business may suffer from diseconomies of scale.LO2) Assess the importance of economies and diseconomies of scale

8. Mix of Resources What does a firm regard as its resources? GROUP 1 GROUP 2 Research and find Research and find information about capital information about labour intensive industries and intensive industries and create a Pictionary create a Pictionary poster. poster. Find relevant advantages Find relevant advantages and disadvantages. and disadvantages.LO3) Understand the advantages and disadvantages of capital and labour intensive resource mixes.

9. TIME TO VOTE! Optimum Resource Mix: Is one approach better The combination of than the other? capital and human resources which allows Prepared to explain the for the greatestreasons for your response. efficiency.

10. Case Study Technology and farming 1. Explain the advantages and disadvantages to farming of being a capital intensive businesses. 2. Explain how farming has benefited by moving away from being labour intensive.LO3) Understand the advantages and disadvantages of capital and labour intensive resource mixes.

11. Re-cap Learning ObjectivesYou should now be able to:1. Identify the causes of economies and diseconomies of scale.2. Assess the importance of economies and diseconomies of scale3. Understand the advantages and disadvantages of capital and labour intensive resource mixes.