Homework Assignment 1
MGT 105: Essentials of Management
6 September 2012
1) When you purchase lower-grade material the quality of product you produce also becomes a lower grade product. If you make the employees work harder, after you lay some off, they may want to be paid more since they are doing more work. Also those that you lay off can collect unemployment and you lose money When getting new equipment, you have to pay for it upfront and depending on what is done and the maintenance of that equipment will depend if you get a profit. With new equipment you never know if it is going to be dependable or not.
2) I believe the most costly would be laying off employees and making the remaining employees work harder. By doing this you could lose work moral and they may work harder but only because they would fear that they might be next in losing their job. The less costly would be switching to the lower-grade material. Yes you would have to sacrifice the quality of product that you put out. You would save money and employees.
3) All three of the options would have obstacles. Quality of product goes down with lower-grade material. Moral amongst the workers if you lay some off and expect the rest to work harder. By purchaseing new equipment you have to pay more out and that goes against trying to cut costs.
4) Personally I would cut the prices by 5% instead of the 10%, keeping with the same material and employees. I would still be making a profit putting out quality product. With that I would try to find other ways to save the company the other 5% so that we wouldn’t jeopardize the product we put out for customers.
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