Efficiency & Cost of Production

Within the Discussion Board area, write 600–800 words that respond to the following questions with your thoughts, ideas, and comments. :

Additional Information: Because the decision about relocating manufacturing operations to the United States is so important, the board of directors at AutoEdge continues to systematically discuss every aspect of the situation.

The following week, CEO Lester Scholl meets you for coffee to discuss next week’s board meeting.

“I’m hearing good things about you,” he says. “Ingrid and George tell me you’ve been very responsive and helpful.”

“That’s good to hear,” you say. “I’ve enjoyed working with them.”

“We’re both busy, so I’ll get right to the point,” he says. “One of the main objectives of any business is to be efficient. Without efficiency, the company is essentially losing money. Am I right?”

“Absolutely,” you say.

“What must AutoEdge do,” he says, “to obtain economies of scale with production? How do we know that it has achieved economies of scale? Conversely, how do we know if it is achieving diseconomies of scale?”

“That’s a good question,” you say. “I can understand why you ask.”

But before you can respond, Lester’s cell phone rings. After a minute, he ends the call and stands.

“I have to get back to the office to handle an emergency,” he says. “Would you send me an e-mail with an answer to my questions, please?”

“No problem,” you say. “I’ll get it to you before I leave work this afternoon.”

“I appreciate it,” he says. “Thanks.”


The story that you are about to read is from actual events that occurred in the

field. Its purpose is to provide you with a real-world example from a seasoned

professional in the business world.

SWOT Analysis

One of the most important tools to use when making a business decision is the

strengths, opportunities, weaknesses, and threats (SWOT) analysis; that is, a

method to assess an organization’s strengths and weaknesses and the internal

and external opportunities and the threats it faces. When I was asked to

evaluate whether it made sense for a stockbroker to market to a new territory,

I immediately began to provide my own opinions and preconceived notions. As

I prepared for my presentation to disclose my evaluation, I noticed that my

opinions were slanted—even untruthful to some degree. I recognized an

opportunity to apply what I’d learned in school and gave SWOT a chance. It

took me 2 hours to develop a well-rounded analysis and to make a more

informed decision. Doing a SWOT analysis saved me from making a big

mistake—one that could have cost the company thousands of dollars and likely

cost me my job.

It is important to take away the following from this scenario:

• A SWOT analysis should be conducted for all major decisions in


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