The effect of increasing size order on purchase prices of railcars is examined using data obtained from suppliers in a survey by a major transit authority. A distinction is made between short-run price and cost, the former being borne by the buyer and the latter by the supplier. The data, consisting of average price points, are converted into marginal cost curves. The analysis indicates that most economies of order size seen by the buyer as per car savings are realised by the time orders reach 60 to 90 cars. Virtually all purchasing economies are reached by the time orders reach 200 cars. Further manufacturing economies of scale, if any, will likely accrue to the suppliers. A corollary is that economies thought to result from the purchase of "off-the-shelf" cars may not exist in a significant way.
Samenvatting