Certified Production & Operations Manager (POM) Practice Exam

What advantage does standardization provide in production?

1. Increases product diversity

2. Reduces production costs

3. Improves operational efficiency

4. Allows for greater product variety

The correct answer is: Reduces production costs

Standardization in production plays a crucial role in reducing production costs. When processes, components, and materials are standardized, it allows for economies of scale. This means that as production volume increases, the per-unit cost decreases due to factors like bulk purchasing of materials, reduced setup times, and streamlined production processes. Additionally, standardization simplifies inventory management and reduces the need for extensive training. Workers can become proficient more quickly because they are dealing with consistent components and processes, thereby reducing labor costs. Although increasing product diversity and allowing for greater product variety can be valuable in certain contexts, they tend to contradict the principle of standardization, which focuses on uniformity rather than variety. Improving operational efficiency is certainly a benefit of standardization but is often a byproduct of the cost reduction achieved through the practices associated with standardizing processes and materials.