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Consider BMW123, an automobile company that produces auto parts (car body and engine) that are assembled into a final car. Exactly one car body
Consider BMW123, an automobile company that produces auto parts (car body and engine) that are assembled into a final car. Exactly one car body and one engine are required to produce one car, which assembly is done at no cost. Currently, the company has 800 employees in Mexico and 800 employees in Hungary, and they cannot be fired or additionally hired. The productivity of these workers (output of parts per worker) are shown in the table below. In addition to the variable labor costs of producing the parts, each factory needs to incur fixed labor costs of 30 workers, for each type of auto parts it produces. Based on this information, respond to the following questions. 2) Suppose there was a technological improvement in the Hungarian factory. The new productivities are shown below. What is the allocation of worker task in each factory in order to maximize output, given the number of employees in each factory (under trade)? What is the total output for BMW 123? (10 points) Country Mexico Hungary Body 20 35 Engine 20 35
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