Question

An internal study at Mimeo Corporation—a manufacturer of low-end photocopiers—revealed that each of its workers assembles three photocopiers per hour and is paid $6 for each assembled copier. Although the company does not have the resources needed to supervise the workers, a full-time inspector verifies the quality of each unit produced before a worker is paid for his or her output. You have been asked by your superior to evaluate a new proposal designed to cut costs. Under the plan, workers would be paid a fixed wage of $16 per hour. Please Type Answer.

Answer 1

Solution:

• The case is about internal study of mimeo corporation which manufactures low and photocopies.
• A new proposal is drafted by superior to cut costs by firing the wages of workers at $ 16 per hour as opposite to current system of payment of $ 6 per assembled copier. Each worker assembles three properties in an hour.
• It's required to evaluate of new proposal is variable and good for too corporation.
• Under the current plan a worker is paid $ 6 per assembled copier and  a worker who works efficiency can assemble . These photocopiers per hour. This means under current plan a worker can earn $ 18 per hour ( $ 6 * 3 photocopiers).
• In the new proposal, wages are proposed to be fired at $ 16 per hour.
• An papers it seems that new proposal will cut the costs by $ 2 per hour but will overlook the quality aspect.
• Under the current system even if supervisor is not present a full time inspector inspects the quality of each unit produced before a worker is paid for his or her output.Thus, he or she will be paid $ 6 for their assembled copier only it passes quality check in inspection.
• In case of fixed wage rate proposal, the workers will get $ 18 per hour regardless of number of units produced. A worker might compromise on quality or may not produce required output 3 assembled copier in fixed wage rate system.
• In observe of supervisors to monitors workers. The new proposal will load to inefficient working .Hence, you should not favor the plan.