Question

Facilitating large scale production is one of the services of wholesalers to manufacturers. What do wholesalers do through this function?

• A. Wholesalers provide financial assistance to the manufacturers in the sense that they generally make cash payment for the goods purchased by them.
• B. They bear lots of risks such as the risk of fall in prices, theft, pilferage, spoilage, fire, etc.
• C. Wholesalers collect small orders from number of retailers and pass on the pool of such orders to manufacturers and make purchases in bulk quantities.
• D. All of the above

Answer 1

Answer: (C)

Large scale production refers to the production of a commodity on a large scale with a large sized firm. It requires huge investments in plant and machinery. Large scale production can be carried out if the market size is large and expanding.Large scale firms are division of labor and production and sale of goods in large quantities. They cater to a large market. The industrial revolution laid the foundation of the factory system. The factory system which extensively used machinery and adopted division of labor made large scale production possible.

The following are some of the motives of large scale production.

1. Desire for economy.
2. Desire for increase in sales.
3. Desire for a large customer base.
4. Desire for large profits.
5. Desire to become a global company.
6. Desire for economic power.
7. Desire for continuous growth and expansion.
8. Desire to increase demand.
9. Desire to overcome competition.
10. Desire to achieve monopoly status.
11. Desire for achieving long term profitability.