The small scale industry can enjoy the status of ________ if it suppli...
The small scale industry can enjoy the status of an ancillary small industry if it supplies not less than 50 per cent of its production to another industry, referred to as the parent unit
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The small scale industry can enjoy the status of ________ if it suppli...
Ya a small scale industry is a ancillary small industry because it produce small parts of a product for another big company . for ex. a small company can produce tyres for a car manufacturing company....
The small scale industry can enjoy the status of ________ if it suppli...
The Answer:
The correct answer is option 'C' - Ancillary Small Industry.
Explanation:
An ancillary small industry is a small-scale industry that supplies not less than 50% of its production to another industry, which is known as the parent unit. Let's understand this concept in detail:
1. Definition of Ancillary Small Industry:
An ancillary small industry refers to a small-scale industry that is dependent on and closely connected to a larger or parent industry. It functions as a supplier or subcontractor to the parent unit and supplies a significant portion of its production to the parent unit.
2. Relationship with the Parent Unit:
The ancillary small industry has a symbiotic relationship with the parent unit. It relies on the parent unit for a consistent demand for its products or services. The parent unit, in turn, benefits from the ancillary industry's specialized skills, expertise, and cost-effectiveness.
3. Advantages of Ancillary Small Industry:
The status of being an ancillary small industry provides several advantages to the small-scale industry:
- Consistent Demand: By supplying a significant portion of its production to the parent unit, the ancillary industry enjoys a guaranteed market for its products or services.
- Reduced Marketing Efforts: Since the parent unit directly consumes a substantial part of the ancillary industry's output, the need for extensive marketing efforts is minimized.
- Cost Savings: The ancillary industry benefits from cost savings due to economies of scale, as the parent unit's larger production volumes can help reduce procurement costs.
- Technical Assistance: The parent unit often provides technical assistance, guidance, and support to the ancillary industry, helping it improve its production processes and quality standards.
- Increased Stability: The dependency on the parent unit ensures stability for the ancillary industry, as it is less vulnerable to market fluctuations and demand uncertainties.
4. Example:
For example, consider a small-scale industry that manufactures automobile components. If this industry supplies at least 50% of its production to a larger automobile manufacturing company, known as the parent unit, it can be classified as an ancillary small industry.
In conclusion, an ancillary small industry enjoys the status of being an ancillary unit if it supplies not less than 50% of its production to another industry, referred to as the parent unit. This arrangement provides stability, cost savings, technical assistance, and a guaranteed market for the ancillary industry.
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