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Commercial bakeries typically sell a variety of products, such as breads, rolls, muffins, and cakes, to local grocery stores.

Answer :

Managers can consider Cross-utilization of Resources and Product Bundling strategies to take advantage of the economies of scale and scope in production

Managers can organize production by bundling related products together, such as offering a variety pack of bread, rolls, muffins, and cakes. This allows the bakery to specialize in producing each item efficiently while still offering a full line of products to the grocery stores.

By sharing resources like ingredients, equipment, and staff across different product lines, managers can optimize production costs. For example, using the same dough for bread and rolls can help in achieving economies of scale.

complete question;

Commercial bakeries typically sell a variety of products (bread, rolls, muffins, cakes, etc.) to local grocery stores. There are substantial economies of scale in the production of each one of the bakery products, which makes it cost-effective to specialize in the production of just one product. Grocery stores, however, prefer to buy from multi-product bakeries that sell a full line of bakery products. How might managers organize production to take advantage of the economies of scale and scope in production and marketing that exist in the baking industry?

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