If a company offers buyers 500 models/styles, what should it consider to manage production costs?

When a company offers a large selection of models or styles, it faces a unique challenge in managing production costs. Upgrading production capabilities is a crucial strategy to streamline operations, improve efficiency, and ensure that the company can handle the complexity and volume associated with producing 500 different models. Enhanced production capabilities can lead to better use of technology, more efficient workflows, and potentially lower per-unit costs over time due to economies of scale.

Investing in marketing initiatives, while important, does not directly address production efficiency or cost management linked to handling numerous models. Reducing the number of models could simplify production but might limit market appeal and customer choice. Increasing prices to retailers may help with margins but does not solve the core issue of how to manage the production complexity effectively and could potentially affect sales negatively. Thus, upgrading production capabilities aligns best with the goal of managing production costs in the context of offering a wide product range.