Which of the following statements about striving to reduce labor costs per pair produced at each of the company’s plants is true? As long as labor productivity at each of the company’s plants is in the range of 2,000 to 2,500 pairs produced per worker, then a company’s labor costs per pair produced will be competitive with the labor costs per pair produced achieved by other companies in the industry
Companies producing branded footwear with a high S/Q rating are unlikely to achieve labor costs per pair produced that are below the industry average in those geographic regions where they have plants.
The most cost effective way for a company to achieve low labor costs per pair produced is to give plant workers annual base pay increases in the range of 10% to 15% annually in each geographic region where it has plants. lo achieve below-average labor costs per pair produced at a particular plant over the long- term, company managers must–each decision round–diligently seek out a combination of base pay increases, piecework incentives per non-defective pair produced, and expenditures for best practices training at the plant that is projected to drive down labor costs even further.
The simplest and most effective way for a company to achieve labor costs per pair produced that are below the industry average is to compensate plant workers at levels that are below the industry average in each geographic region where it has plants.
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