Question

If a company is striving to gain a competitive advantage by producing its branded footwear at a lower per pair production cost than some/many/all rival firms, then it should regularly review the production benchmarks on p. 6 in each year's Footwear Industry Report to

A. determine whether to (1) invest in one or more production improvement options at one or more production facilities or (2) replace refurbished footwear-making equipment with new production equipment at one or more of production facilities

B. gauge whether its efforts to achieve a low-cost advantage per branded pair produced have been more/less successful than other companies pursuing much the same outcome and to learn what aspects of its production operations may warrant further actions to reduce costs per pair.

C. determine whether it should close down whichever production facility has the highest total production costs per branded pair produced.

D. determine whether it should spend more/less on best practice training at one or more production facilities and/or make maximum use of overtime to improve cost efficiency at one or more of its production facilities and/or expand its production capacity at one or more of production facilities.

E. how much further it needs to reduce the S/Q rating of the pairs being produced in order to achieve the lowest possible total production costs per branded pair produced at each of its production plants.

Answer 1

A company should review production benchmarks to make strategic decisions and assess cost-efficiency.

Step-by-step explanation:

A company striving to gain a competitive advantage by producing its branded footwear at a lower per pair production cost than rival firms should regularly review production benchmarks in each year's Footwear Industry Report to:

1. Determine whether to invest in production improvement options or replace refurbished footwear-making equipment with new equipment at production facilities.

Gauge the success of its efforts to achieve a low-cost advantage compared to other companies pursuing similar outcomes and identify areas for further cost reduction.

1. Assess whether it should close down the production facility with the highest total production costs per pair produced.
2. Decide whether to spend more or less on best practice training, make use of overtime, or expand production capacity at production facilities.
3. Understand how much further it needs to reduce the S/Q rating of the pairs produced to achieve the lowest possible production costs per pair at each production plant.

Understanding the dynamics of economies of scale is important in this context, as scaling up production can reduce the cost per unit. Moreover, aligning production with the area of comparative advantage, as illustrated by the shifts in labor and production between the United States and Mexico, can also enhance output and efficiency.