EDLD+5342+Week+4+Part+2-+Understanding+Economy+of+Scale

EDLD 5342 Week 4 Part 2 In this week’s lecture this, Dr. Lu Stephens spoke about how larger schools districts can have an advantage over smaller districts due to having more students to divide to cost with. “Economy of scale is a concept that indicates that increasing the size of an organization can result in a lower per unit production cost. In other words, as an organization becomes larger, it develops the ability to reduce infrastructure costs for the product produced. Very often the result is more instructional program revenue per student, which enriches the academic programs of the district. Equally important, is the fact that the larger district can use some of the efficiency savings to improve teacher salaries. An improved salary schedule usually enables the district to attract and retain more excellent teachers.” As we can see in the data above, both districts have similar numbers for total revenue per student and total operational costs per pupil. The major difference is in the total number of students with District 1 at 830 while District 2 has 32,326. Obviously, District 2 will receive considerably more funds. Even with 43 campuses, District 2 is able to use their funds to create more differentiated learning facilities, create more instructional opportunities, and pay better salaries to attract and retain great teachers. The operating cost will also be lower for District 2 because in can be spread between so many more students. District 1 will have less to spend on facilities, programs and teachers because the concentration of students is greater which drives up the operating costs per student.
 * Week 4 Part 2 Data || District1 || District2 ||
 * Total # of Students || 830 || 32,326 ||
 * Total Revenue per pupil || $10,529 || $10,316 ||
 * Total Operational Expenditures per pupil || $8,611 || $8,908 ||
 * <span style="color: #8064a2; font-family: "Times New Roman","serif"; font-size: 16px;">Average teacher salary || <span style="color: #8064a2; font-family: "Times New Roman","serif"; font-size: 16px;">$39,771 || <span style="color: #8064a2; font-family: "Times New Roman","serif"; font-size: 16px;">$50,307 ||