Relative to the size of a warehouse operation, when do facilities and materials-handling costs on a per-unit basis decrease?
A) when volume decreases
B) when volume increases
C) when volume stays the same
D) when volume has ongoing fluctuations

Question

Quizplus · Accepted Answer

Facilities and materials-handling costs on a per-unit basis decrease when volume increases due to economies of scale. As the volume of goods processed increases, the fixed costs of the warehouse (such as rent, utilities, and salaries for permanent staff) are spread over more units, reducing the cost per unit.

Relative to the Size of a Warehouse Operation, When Do