Summary

Economies of scale are where costs per unit decrease as a firm grows in size

Internal economies are specific to one firm as it grows in size e.g. technical, purchasing, marketing

External economies involve a number of firms

Diseconomies of scale occur when the firm experiences a rise in unit costs as the firm grows e.g. communication

Capacity utilisation measures how much of the production capacity is used by the organisation

Capital intensity is where production is most reliant on capital

Labour intensity is where production is most reliant on labour

Research and development is where businesses come up with new ideas for products and processes

Critical Path Analysis is a planning and management tool