Geography 2143A/B Lecture Notes - Lecture 3: Basic Oxygen Steelmaking, Least Common Multiple, Product Differentiation
10 Apr 2020
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Application : costs increases in proportion to area, output increases in proportion to volume, so. Principles of multiples: economies of scale can be achieved by scaling up equipment. Those that complete their step in the production chain at the slowest rate will hold all faster machines back to their speed unless a principle of multiples is applied. The lcm is 6, so machine 3, the slowest. The smooth operation of a plant including production and marketing, requires maintaining some minimum level of stock, raw materials, fuel, spare repair parts and extra machines. These economies are harder to document although their existence is easy to understand. Most evident where equipment must be taken out of service at regular intervals for maintenance. A basic oxygen furnace in the steel industry must be relined with refractory bricks every 25 to 40 days. Two furnaces are needed to keep a steady flow of steel.
