OPERATION MANAGEMENT
OPERATION MANAGEMENT
2nd Edition
ISBN: 9781260242423
Author: CACHON
Publisher: MCG
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Question
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Chapter 4, Problem 1CQ
Summary Introduction

To explain: The effect on the costs of direct labor.

Expert Solution & Answer
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Explanation of Solution

Correct option: (a)

Correct answer:

Costs of direct labor would be 50 percent lower.

Justification:

It is given that the process is replicated in another country in which the wages are 50% lower compared to the existing country. It is also mentioned that the staffing and processing times are identical to the existing country. Therefore, there will not be any need for the additional time required. Naturally, the direct labor costs will be 50% lower.

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