El Niro Inc

question 95

Multiple Choice

El Niro Inc. is automating processes so the company can meet its demand with a smaller workforce. The CEO asks Megan, the vice president of human resources, for advice on how to address the resulting labor surplus. Megan studies the workforce and observes that many employees are in their 50s and 60s. Furthermore, these employees are the highest-paid workers in every job category. Based on this information, what should Megan suggest as the most effective way of addressing El Niro's labor surplus?

• A) The workforce should be downsized, with layoffs focusing on the older employees.
• B) Retrain the older employees in order to make them work more productively.
• C) Provide performance-based pay to increase production output by the employees.
• D) Replace the employees with contract workers.
• E) Offer early retirement incentives to the employees in their 50s and 60s.

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Definitions:

Direct Labour

The labor costs associated with employees who are directly involved in the production of goods or services.

Gross Margin

The difference between sales revenue and the cost of goods sold, showing the profitability of sales before other operating expenses are deducted.

Cost of Goods

The total direct costs attributable to the production of goods sold by a company, including materials and labor.

Cost of Goods Manufactured

The aggregate expense of finished goods within a certain timeframe, encompassing materials, workforce, and indirect costs.