Which of the following factors keeps production costs low in the modern automobile industry?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Through just-in-time production
Option (1) Through just-in-time production — Correct. In just-in-time production the parts suppliers are located around the factory and send the parts every two hours, only when they are needed. The company keeps no large stocks, so it saves on storage and on money locked up in unused parts. Along with outsourcing, just-in-time keeps costs low for the company, though it keeps the workers under constant pressure.
Option (2) By lowering the demand for cars — Incorrect. A firm wants more demand, not less. Lower demand means lower sales; it does nothing to reduce the cost of making each car.
Option (3) Through mechanised production — Incorrect. Mechanisation raises output and cuts the number of workers, but the machines themselves need heavy investment. It describes how cars are made on the assembly line, not the method this factory uses to keep its costs low.
Option (4) By employing unskilled labour — Incorrect. The question’s factory saves through outsourcing and just-in-time supply; nothing in its working depends on employing unskilled labour.
NCERT (2025-26): “5.4 How is work carried out? … In Maruti Udyog Ltd., two cars roll off the assembly line every minute. Workers get only 45 minutes rest in the entire day - two tea breaks of 7.5 minutes each and one lunch break of half an hour. Most of them are exhausted by the age of 40 and take voluntary retirement. While production has gone up, the number of permanent jobs in the factory has gone down. The firm has outsourced all services like cleaning, and security, as well as the manufacture of parts. The parts suppliers are located around the factory and send the parts every two hours or just-in-time. Outsourcing and just-in-time keeps costs low for the company, but the workers are very tense, because if the supplies fail to arrive, their production targets get delayed, and when they do arrive they have to run to keep up. No wonder they get exhausted.…” |