rates, the production levels, costs of production, and the mount of labor opportunities available within the company. The high cost of skilled labor and the underlying costs of labor turnover are the two costs that will adversely affect decision making about whether to hire temporary or permanent.
The demand for skilled labor is determined by the needs of all the competitors for skilled staff. If this demand is high, the wage rate rises too and it is impossible to employ many more people to meet the demand gap.
Opportunity costs refers to the cost of the next best foregone opportunity when only one item or decision is made from several mutually exclusive choices. It is the implicit cost incurred by the employee deciding to pick one job opportunity over another or the company picking one employee over an equally skilled and qualified applicant.
Measurement 测量
The amount of labor turnover in the company�s branch in the United States is 100 employees per year from a total workforce of 500. This represents a fifth of the total labor force. The current figures indicate that 150 of the total number of employees working for the company are on 6 months to 1 year contractual basis. The company�s production levels rose from 1,202,876 in the three quarters of 2010 as compared to 994,567 units in the same period in 2009. This significant growth caused a strain on the workforce because only 300 employees work in the main production line. The estimated output of the company with an optimum labor force is 2,000,000 units in 9 months without taking into account any increased demand of the modems or any increases in the efficiency of the production line (Schiff, & Andrew, 2010).
Product estimates are that to produce an extra employee is required to produce 1,000 units above the optimum. Labor generally accounts for 60% of the total cost of production. Temporary employees are paid about 10% less than the permanent employees
This rise in growth means that there was a huge labor deficit in the previous three quarters that has to fill given that demand is expected to increase by double the margin in the next three quarters. Demand is the desire to acquire an item, a modem in this case. It is the combining of the ability to pay for the product with the willingness or desire to buy it at a specific point in time. It is the opposite of supply, which is the ability of a company, such as Huawei Technologies in this case to meet the demands of the consumer.
Analysis 分析
The increase in demand has caused a significant strain on the production line. It is clear that it would have been possible to meet the demand of the modems in the last three quarters if the labor force had been increased. The steady growth of the market for the modems has increased the demand for the product and will most likely double it by next year. The company needs to be adequately prepared to produce more units in the next three quarters to meet the demand. This increase in supply must be done to increase the sales volumes and the profit turnover. Supply refers to the total amount of product that a company is willing to avail to a customer at a specific point in time. It is the ability of the company to meet the desires of the market by having the product in the market.
The supply of a product is not the only driving factor for the increase in workforce numbers. The prevailing market prices of the product determine the amount of revenue generated. Market prices refers to the establis
