Question
Which of the following statements about striving to reduce labor costs per pair produced at each of the company's plants is true? Companies producing 50
Which of the following statements about striving to reduce labor costs per pair produced at each of the company's plants is true?
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.
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.
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 $0.25 per non-defective pair, and spend minimally on best practices training for production workers.
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).
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 the industry-low) in each region where the company has production facilities (as reported on p. 6 of the FIR).
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