Elevators generally break down at random times and for different reasons. Elevator maintenance contractors must have trained service personnel to provide routine and emergency services. Shanon elevator has 200 service personnel to maintain 1,000 elevators.
a. Suppose that Shanon has received a contract to maintain an additional 1,000 elevators. Do you expect that Shanon will need to double service personnel? Why or why not?
b. Does the example in (a) illustrate economies of scale or scope?
c. Escalators and elevators use quite different technology and parts. But many clients operate both escalators and elevators. Are there any economies of scope for a contractor to maintain both escalators and elevators?
Kindly use a graph to illustrate the answer wherever necessary.
In this case study can you identify the main problem and what is the objective? Thank you.
Elevators generally break down at random times and for different reasons. Elevator maintenance contractors must have trained service personnel to provide routine and emergency services. Shanon elevator has 200 service personnel to maintain 1,000 elevators.
a. Suppose that Shanon has received a contract to maintain an additional 1,000 elevators. Do you expect that Shanon will need to double service personnel? Why or why not?
b. Does the example in (a) illustrate economies of scale or scope?
c. Escalators and elevators use quite different technology and parts. But many clients operate both escalators and elevators. Are there any economies of scope for a contractor to maintain both escalators and elevators?
Kindly use a graph to illustrate the answer wherever necessary.
In this case study can you identify the main problem and what is the objective? Thank you.
