A U.S. company has two manufacturing plants, one in Michigan and one in Toluca, Mexico. Both produce the same item, each for sale in their respective countries. However, their productivity figures are quite different. The analyst thinks this is because the Michigan plant uses more automoted equipment for processing while the other plant uses a higher percentage of labor. Explain how that factor can cause productivity figures to be misleading. Is there another way to compare the two plants that would be more meaningful?
A U.S. company has two manufacturing plants, one in Michigan and one in Toluca, Mexico. Both produce the same item, each for sale in their respective countries. However, their productivity figures are quite different. The analyst thinks this is because the Michigan plant uses more automoted equipment for processing while the other plant uses a higher percentage of labor. Explain how that factor can cause productivity figures to be misleading. Is there another way to compare the two plants that would be more meaningful?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A U.S. company has two manufacturing plants, one in Michigan and one in Toluca, Mexico. Both produce the same item, each for sale in their respective countries. However, their productivity figures are quite different. The analyst thinks this is because the Michigan plant uses more automoted equipment for processing while the other plant uses a higher percentage of labor. Explain how that factor can cause productivity figures to be misleading. Is there another way to compare the two plants that would be more meaningful?
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