A–Z Rubber Products has decided to relocate its manufacturing operations overseas because it is seeking an advantage by operating a larger manufacturing plant. What is the reason for this decision to expand internationally? (A) To minimise taxation (B) To gain economies of scale (C) To cushion the economic cycle (D) To take advantage of regulatory differences

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A–Z Rubber Products has decided to relocate its manufacturing operations overseas because it is seeking an advantage by operating a larger manufacturing plant - HSC - SSCE Business Studies - Question 3 - 2003 - Paper 1

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A–Z Rubber Products has decided to relocate its manufacturing operations overseas because it is seeking an advantage by operating a larger manufacturing plant. What... show full transcript

Worked Solution & Example Answer:A–Z Rubber Products has decided to relocate its manufacturing operations overseas because it is seeking an advantage by operating a larger manufacturing plant - HSC - SSCE Business Studies - Question 3 - 2003 - Paper 1

Step 1

To gain economies of scale

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Answer

The primary reason for A–Z Rubber Products to relocate its manufacturing operations overseas in order to operate a larger manufacturing plant is to gain economies of scale. By increasing production capacity, the company can reduce the per-unit cost of production, enhance efficiency, and improve competitiveness in the international market.

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