Question: Questions 2 1 - 2 7 are based on the following. Fjord Furniture has been manufacturing furniture in the United States for two decades. Based
Questions are based on the following. Fjord Furniture has been manufacturing furniture in the United States for two decades. Based in Ohio, Fjord produces standard, noncustomized furniture for median pricerange consumers. The furniture is produced through manual labor, and Fjord's primary advantage is the low cost of materials that are available close to the production facilities. The recent introduction of hightechnology equipment such as laserrobotic lathes offers Fjord the opportunity for Fjord to reduce its reliance on manual labor and increase the use of automated systems. Adopting this technology will also allow the production facilities to operate aroundtheclock. Profit margins are likely to decline after five years as competitors adopt the new technology. Fjord is located in a region whose economy has been plagued by corporate consolidations and changes in manufacturing processes. Strong labor unions dominate the region, even though labor union membership has been declining in recent years. The local press has focused its reporting on the negative effects of outsourcing and workforce reductions. A state government office wants a special order of furniture. Fjord is not currently operating at full capacity, but accepting the special order would require a reduction in production for regular customers. The state order is percent less than Fjord normally charges. Fjord should produce furniture for the state and reduce other production if
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