Scott Is a Manager at a Pool Cleaning Business

question 81

Essay

Scott is a manager at a pool cleaning business.He has hired 10 workers to clean pools for him and is considering what type of payment scheme he should set up for his workers.He can pay each of his workers $10 per hour to clean pools, or he can pay his workers $20 for each pool a worker cleans.(It takes 2 hours, on average, for an employee to clean a pool thoroughly.)If Scott wants to maximize the number of pools his workers clean in one day, which payment scheme should he use? Explain.

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Definitions:

Five Forces Model

A model developed by Michael Porter that helps us understand the five competitive forces that determine the level of competition and profitability in an industry.

Competitive Forces

Refer to the various external factors that influence the level of competition in an industry, impacting how businesses operate and compete. This includes rivals, threat of new entrants, supplier power, buyer power, and threat of substitute products or services.

Rivals

Competitors within the same market who are vying for the same customers with similar products or services.

Buyers

Individuals or entities that purchase goods or services for personal use, resale, or production.