A contractor is thinking about choices for enhancing the manufacturing procedure for his custom wood-flooring concept. He began the company as part-time venture and desired to increase production efficiency to support the growing interest for his pine flooring design. The contractor was unsure whether he should purchase new equipment or hire part-time labor, but he understood that in either case, he would need to alter the current process to make sure that capacity would satisfy 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?