(Answered) : Conversely, low volume, high variety, high variation and high customer contact generally carry some kind of cost penalty for the

Conversely, low volume, high variety, high variation and high customer contact generally carry some kind of cost penalty for the operation”. share the views of this statemet

Expert Answer

Cost of operations consists of two main parts i.e. production cost and set up costs. High volume low variety low variation operations keep the processing cost low by keeping setups to a minimum level and obtaining the economies of scale. However for low volume, high variety, high variation and high customer contact operations this economies of scale does not remains possible and frequent changes results in high per unit cost

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