SUMMARY: Increased competition, shifting customer preference and changing

marketplace dynamics in vehicle industry have led to increased product

proliferation faster than the overall rate of sales growth in the industry. The result
has been the decrease in the average volume per vehicle body style produced
and sold, therefore companies were unable to attain economies of scale which
increased their cost and reduced profits.
MANAGEMENT DECISION PROBLEM- Which manufacturing strategy to adapt so as
to attain economies of scale while meeting increasingly stringent demands for
high quality and different customer preferences
AIM- Cost effective manufacturing strategy that drive plant utilisation to 100% to
achieve maximum economies of scale and minimising capital investment.
REASON- Flexibility and Complexity