How would a manufacturer benefit by using fewer scarce resources?<\/p>\n
A. The product would be less expensive to produce.<\/p>\n
B. The product would better satisfy consumer needs.<\/p>\n
C. The product would be popular and readily available.<\/p>\n
D. The product would provide a more satisfactory profit.<\/p>\n
Answer: A. The product would be less expensive to produce.<\/b><\/p>\n
When a manufacturer applies a few of the scarce resources in its operations, it is in a position to cut most of its costs. This is because scarce resources by definition are restricted and available in limited quantities and in most cases, they are cheaper to obtain. This means that a reduction of the usage of these resources will lead to a reduction of its costs which is an input of manufacturing.<\/p>\n
For instance, let\u2019s discuss an instance of a smartphone producer. Some of the components of the smartphone often contain rare earth elements that are regarded as limited or scarce earth. If the manufacturer can use less of these elements in each phone or invent other technology that does not need such materials, they would be able to cut their production costs considerably. Likewise, a car manufacturer can design engines that function more efficiently hence using lesser amounts of platinum for the catalytic converters or look for other ways of incorporating rare earth magnets in electric motors.<\/p>\n
Such cost reduction may have one or the following effects on the manufacturer, that includes; It can increase the marketing mix by resulting in higher profit margins if they keep the price same. Otherwise, they could decide to reduce the price of the product to acquire a dominant position in the market, which would increase the company\u2019s market share. It also helps to build up the company\u2019s supply chain security, or price variation of limited resources.<\/p>\n
As mentioned earlier, one must bear in mind that employing less scarce resources mostly advantages the producer in reducing costs, which may still have positive ripple effects. They can promote more sustainable ways of producing goods, which in today\u2019s world that is more conscious about its environment, is more desirable. Moreover, it also incites creativity as organizations look for methods of manufacturing their products with the other readily available elements.<\/p>\n","protected":false},"excerpt":{"rendered":"
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