Certified Production & Operations Manager (POM) Practice Exam

What is generally used to facilitate an organization strategy that emphasizes low cost?

1. Customization

2. Sustainability

3. Speed to market

4. Standardization

The correct answer is: Standardization

Standardization is a method that enables organizations to facilitate a strategy focusing on low costs by ensuring uniformity and consistency across processes, products, and services. By standardizing components, organizations can achieve economies of scale since they produce large quantities of the same item, which often leads to reduced manufacturing costs and lower input prices. Additionally, standardization minimizes variability within production processes, which can enhance efficiency and reduce waste. This efficiency ensures that resources are used optimally, further driving down costs. When an organization focuses on standardization, it simplifies training and reduces the need for specialized skills, which can also contribute to cost savings. While customization, sustainability, and speed to market may be relevant strategies for other types of organizational goals—such as creating unique offerings, minimizing environmental impact, or quickly responding to market changes—they do not align as closely with a low-cost emphasis, which benefits significantly from the efficiencies and economies achieved through standardization.