Focused factories from geographical to product segmentation

1 Focused factories from geographical to product segmentation 

Traditional thinking is that this organisational strategy will deliver cost advantages to a global company. While this is true for production costs, the same is not necessarily tme for inventory-holding costs and transport costs. 

Focused factories have an impact on the important trade-off between cost and delivery lead time. Make a list of the advantages and disadvantages of focused factories. One example of each has been entered in the table below to start you off. 

Advantages Lower production costs through economies of scale Specialised equipment may be able to manufacture quicker 

Disadvantages Higher transport cost Longer distance from market will increase lead time 

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