Question

ExAlt Technologies forecasts a sales increase in several product lines, so management is planning how to expand production capacity at its three factories in Mississippi, Poland, and Thailand. The HR department prepares estimates of local labor costs and availability of workers in each location. What else should the decision makers take into account when planning labor needs?

Answer 1

The answer is: They should weigh labor costs and availability against financial and operational requirements.

Step-by-step explanation:

When a company is planning to increase its production and needs to determine where they should expand their production facilities, one of the factors to consider is labor costs but they aren't the only costs that need to be calculated.

Higher or lower labor costs have to be weighed against financial costs and operational requirements needed to expand the production facilities.

For example, the labor costs in Thailand are much lower than those in Mississippi and Poland but what about the operational and financial costs? If the financial costs of increasing production in Thailand are much bigger than in Mississippi, the saving in labor costs can be offset by the higher financial costs.