Joey is trying to make sure he meets the standards he has set for labour expenses...
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Joey is trying to make sure he meets the standards he has set for labour expenses at his business. He believes each product can be built in 2.33 man-hours and each man-hour should cost $20. He is considering the following options for his six workers: Option A-hourly wages with small bonuses Hourly wage: $19 Annual hours per worker: 2,000 Expected production: 5,150 units Expected product defect rate: 1% Expected performance bonuses: $0 Expected year-end bonuses: $1,000 per worker Option B- hourly wages with large bonuses Hourly wage: $17 Annual hours per worker: 2,200 Expected production: 6,200 units Expected product defect rate: 2.5% Expected performance bonuses: $75 per 100 units Expected year-end bonuses: $3,000 per worker Analyze and discuss the pros and cons of each option. Make recommendations to Joey (feel free to make other business recommendations, not limited to salary structure). Joey is trying to make sure he meets the standards he has set for labour expenses at his business. He believes each product can be built in 2.33 man-hours and each man-hour should cost $20. He is considering the following options for his six workers: Option A-hourly wages with small bonuses Hourly wage: $19 Annual hours per worker: 2,000 Expected production: 5,150 units Expected product defect rate: 1% Expected performance bonuses: $0 Expected year-end bonuses: $1,000 per worker Option B- hourly wages with large bonuses Hourly wage: $17 Annual hours per worker: 2,200 Expected production: 6,200 units Expected product defect rate: 2.5% Expected performance bonuses: $75 per 100 units Expected year-end bonuses: $3,000 per worker Analyze and discuss the pros and cons of each option. Make recommendations to Joey (feel free to make other business recommendations, not limited to salary structure).
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Answer rating: 100% (QA)
Option A provides the defectfree output of 5098 unit... View the full answer
Related Book For
Operations and Supply Chain Management
ISBN: 978-0078024023
14th edition
Authors: F. Robert Jacobs, Richard Chase
Posted Date:
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