Scale of business.

Answer:

The size of a business unit is a relative term. Very often it seems to be a great problem in deciding which is the optimum size of a particular type of business. It is not very easy to select a suitable standard and standards to measure the size of any units. Sometimes, the nature of output or the nature of the industry is taken to measure the size of a unit. Volume of output is however also used as the indication of the size when the product is homogenous .But there emerges a number of problem in industries like cotton textile, Jute etc. Which produce a wide verity of products? Here volume of output fails to reflect the differences in the size of the industrial units. Although there are different yardsticks in view of a number of products, there are some common factors which deserve consideration these maybe stated as follows:

01. Volume of Output:

An industrial unit maybe termed as big or small considering the volume of outputs per day. But this is the point which is applicable only when products are homogeneous.

02. Capital Investment:

This is the most important point which may be taken into consideration for measuring Size of the business unit .the more the capital investment .the bigger is the size of the business unit.

03. Number of wage earners employed :

The number of wage earners employed is taken as the yardstick of measuring the size of some business unit.

04. Use and consumption of power :

Lick number of workers employed in a business enterprise. The use of power is another factor that deserves discussion. One can also compare the size of the competing units by way comparing the amount of power consumption.

05. Value of product:

The value of product is sometimes taken as the measuring rod of a business unit. Although the factors as discussed earlier are not less important in this connection.