Now determine how much overall costs will decrease at the end of $12$ months.

Total fabric and labor costs before Kaizen improvements

Total fabric and labor costs after Kaizen improvements

Cost decrease resulting from Kaizen improvements

The net cost of combining the environmentally friendly dye and the Kaizen improvements is

The net cost of combining the environmentally friendly dye and the Kaizen improvements is

$$

less than

greater than

the fine.$$

Therefore, USA

$$

$$should not

should

combine the environmentally friendly dye and the Kaizen improvements.

Requirement $3.$ Refer to requirement $2.$ How could the reduction in material and labor costs be$$ accomplished? Are there any problems with this$$ plan?

Reduction in materials can be accomplished by

$$

Reduction in direct labor can be accomplished by

$$

$$improving the efficiency of operations and decreasing down time increasing sales

reducing waste and scrap selling less colored T$-$shirts USA must be careful that

$$

productivity improvements and cost reductions do not in any way compromise product quality selling less colored T$-$shirts will not adversely affect its customers

it can manufacture enough shirts to meet the increase in sales.