When Tuscarora Transport was purchased by Domus Logistics Inc., Domus was able to reduce costs by using the larger customer base to ensure trucks filled to capacity on the routes, to increase utilization of salaried maintenance personnel in outlying regions to 80% from 60% and to more broadly allocate the costs of telecommunications hardware and administration. What is the term for these types of benefits to Domus of the Tuscarora acquisition?

Question

Quizplus · Accepted Answer

The benefits described (filling trucks to capacity, increasing utilization of maintenance personnel, and allocating costs more broadly) are all examples of economies of scale, which is the term for the cost advantages that arise when production expands.

When Tuscarora Transport Was Purchased by Domus Logistics Inc