Talk:Economies of scale

Economies of scale
The article confuses economies of scale (returning margins to scale) with efficiencies of physical size.

Economies of scale apply to the volume of production and the discounts associated with high utilization of productive capacity in either self-owned or contract operations. To grow you add capacity that increases your cost and higher volume uses more of the new capacity. In contract production multiple brands supply the volume, but discounts are significant for guaranteeing a large % of a contractor's line production.

Efficiencies of size are those characteristics of larger machines or systems that are a matter of the higher efficiency of large size systems such as aerodynamic efficiency of large vs small rotors or the geometric advantages mentioned in the article.

To not clearly define these confuses the operational economics issues with a misinterpretation of economies of scale over the last 20 years. This has led to strategies stressing size, mega data centers and wind turbine and projects, despite consistent evidence that that mega sizing is not an economic benefit or advantage in sectors that use volume strategies. Volume wins over size almost universally in more volatile landscapes. Which mot sectors have become. Rmassimo (talk) 19:22, 30 May 2023 (UTC)