A contractor is considering options for improving the manufacturing technique of his custom wood-flooring concept. He started the organization as an ingredient-time venture and preferred to improve production efficiency to aid the growing interest for his pine flooring design. The contractor was unsure whether he can purchase new equipment or hire part-time labor, but he understood that either in case, he will have to affect the current tactic to make certain that capacity would fulfill the approaching year's forecast-ed demand.
If Sullivan hires one additional worker, how can the manufacturing operation be allocated between workers to reduce the time to manufacture each board? How will production capacity be affected without other changes to the manufacturing operation?
Repeat question 5 for hiring two additional workers.
Use the least cost approach to evaluate the proposed changes to the manufacturing operation. Which option (router, one additional worker, or two additional workers) is most cost effective? Use the profit maximizing approach to evaluate the proposed changes. What does this analysis reveal about each option?