Define the term 'diseconomies of scale'.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

1. The situation where (average) costs of production increase (1)
2. when the scale of operation is increased (1)
3. when the business is large (1)
4. [2 marks] Sound definition 2 of the factors listed above
5. [1 mark] Partial definition 1 of the factors listed above
6. [0 marks] No creditable content.
7. Answers could include:
8. To design, create, produce goods and services for an organisation and its customers – effectively.
9. To direct and control the transformation process so that it is efficient and effective and adds value.
10. To procure appropriate inputs in a cost-effective way.
11. To manage an appropriate inventory level effectively.
12. To focus on quality, speed of response, flexibility, type/cost of the production process.
13. To achieve an effective labour/capital production mix.
14. To incorporate latest technological approaches into the production process.
15. To choose the optimal location for the business.
16. Accept any other valid response.
17. [3 marks] Sound explanation of two functions of an operations management department.
18. [2 marks] Sound explanation of one function of an operations management department or partial explanation of two.
19. [1 mark] Partial explanation of one function of an operations management department or a list of two functions or a definition of operations management.
20. [0 marks] No creditable content.