Comprehensive Exam $-$ Gautam Chawla

$-$Previous

Question $36$

Next$-$

Questions List

Which of the following statements about striving to reduce labor costs per pair produced at each of the company's plants is true?

Achieving labor productivity of $3,000$ pairs per worker at a production facility is nearly always sufficiently high for a company's production labor costs per pair $($after rejects$)$ at the plant to be close to the industry$-$low $($as reported on p$.6$ of the most recent FIR$).$

A company pursuing a low$-$cost provider strategy is better able to pursue actions aimed at achieving low labor costs per pair produced in each of its production facilities $($as compared to the labor costs of companies with production facilities in the same regions$)$ than is a company pursuing a strategy to differentiate its product offering from rivals in ways that enhance buyer appeal for its branded footwear.

Companies producing $50$ models$/$styles of branded footwear having a high S$/$Q rating at a production facility in the Asia$-$Pacific region are unlikely to be able to achieve labor costs per pair produced that are below the industry average.

All companies, regardless of the strategy$/$competitive approach being employed or their financial circumstances, have the means to pursue actions to manage worker compensation and worker productivity in a manner that results in production labor costs per pair reasonably close to or below the industry$-$average $($and sometimes close to company has production facilities $($as reported on $p.$

The cheapest way for a company to achieve low labor costs per pair produced is to give production workers base pay increases in the range of $10\%$ to $15\%$ annually in each geographic region where it has production facilities, pay workers an incentive of no more than $$0\mathrm{.}25$ per non$-$defective pair and spend minimally on best practices training for production workers.

Next$-$