Final answer:
To resolve failing to meet production targets in a traditional production system, a manufacturing company can expand or reduce production, hire or lay off workers, and adjust technology or processes. The firm may also explore opening new facilities or optimizing existing ones, always mindful of the diminishing returns associated with such changes.
Step-by-step explanation:
In a manufacturing company operating within a traditional production system, not meeting the production target in one shift can be addressed in several ways. To resolve this issue, the company could either expand or reduce production based on demand and capacity. If resources are limited and demand is high, improving technology or optimizing production processes could also be beneficial.
When the cost of input increases, the firm might seek alternative technologies or inputs to maintain cost-effectiveness. Moreover, in the case of a continued shortfall in meeting production targets, the company may consider hiring additional workers to increase output or, alternatively, lay off workers if solving the production issue does not require additional labor. Finally, opening new factories or improving existing facilities can enhance production capacity, but such measures typically require significant investment and time.
In the example of lumberjacks using a two-person saw, increasing the number of lumberjacks may initially boost output (Stage 1), but eventually, additional hires lead to diminishing returns (Stage 2), where each new worker contributes less and less to total production. Managers must consider such factors when addressing production shortfalls, always aiming for operational efficiency.