Chapter 9, Problem 1QFT

To determine

The way the bar code technology altered the retailing production function and the effects of a similar amount of investment without the new technology.

Concept Introduction

Economic Growth: The economy mustbe growing when there is increase in the production of goods and services per head, when two time periods are compared.

Answer to Problem 1QFT

• The cost for the retailer increased because of installation of the bar code technology but the new technology has reduced the cost of the labor.

• Thus, ultimately the bar-code technology has helped in the drive ofcomputerization of the entire retail industry.

Explanation of Solution

• The bar code technology helped the entire retail industry in computerization. With the help of bar code technology, the retailers can continuously track sales, reorder stocks, determine what to keep in thewarehouses, andproductivity of each individual workers.

• Because of this technology, the labor cost is reduced up to 40%, though it has increased the cost of installing the machines. But the installation cost is anyhow less than the reduced labor cost.