A tire manufacturer currently produces tires in small quantities as they are ordered. The company learns that it can reduce costs significantly by producing one type of tire at a time in large quantities and storing its unsold tires for later sale. Should the company switch to large quantity production?
A. Yes, because this will help the company in achieving economies of scale in production.
B. No, because this will prevent the company from providing tires as they are ordered.
C. No, because this will cause the company to incur unexpected transportation costs.
D. Yes, because this will allow the company to utilize JIT delivery systems.
E. No, because this will not enable the company to improve its production speed per tire.
Answer: A
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