A manufacturer uses a low-cost strategy.

The correct answer is B. Increasing economies of scale in purchasing .

A low-cost strategy depends on controlling and reducing cost. Standardizing components, such as reducing multiple screw versions to fewer common screws, increases purchasing volume for fewer items. This can reduce unit purchase cost, simplify inventory control, reduce complexity, and improve purchasing leverage.

The strategy material identifies cost leadership and low-cost provider as recognized competitive strategies. Exact extract: “Business Strategy Focus: Distinctive competence in the field • Cost leadership • Product differentiation • Focus (cost or differentiation).”

Another exact extract lists the generic competitive strategies: “Here are the 5 that were identified 1. Low-cost provider 2. Broad differentiation 3. Best Cost Provider 4. Focused Low-Cost Provider 5. Focused Differentiation.”

Therefore, reducing screw variety supports a low-cost strategy mainly by increasing economies of scale in purchasing .

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