What is the right choice: The generic operations strategy that emphasizes capital-intensive methods to achieve higher labour productivity and lower unit costs is referred to as .... - Outsourcing -...

What is the right choice:

The generic operations strategy that emphasizes capital-intensive methods to achieve higher labour productivity and lower unit costs is referred to as ....

- Outsourcing

- Flexible factories strategy

- Low labour cost strategy

- Scale-based strategy 

- Focused factories strategy

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Of the options that you have given here, the best answer is “scale-based strategy.”  None of the other strategies mentioned here apply.

Focused factories and flexible factories are opposite concepts that have to do with what a factory is made for.  A flexible factory can make a variety of different things.  For example, such a factory might be able to make more than one model of car.  By contrast, a focused factory can make only one sort of thing.  These concepts do not say anything about the mix between capital costs and labor costs.

Outsourcing is a way of cutting costs.  However, it does so by having an outside company take over certain functions.  It does not specify how that company will perform those functions.

A low labor cost strategy centers around paying workers less money.  This is not typically done by increasing the use of capital. 

A scale-based strategy does revolve around increased use of capital.  In such a strategy, a firm builds the largest plants that it can, using the most machinery that it can.  This increases the productivity of each worker.

For these reasons, “scale-based strategy” is the correct answer.

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