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List and Describe the Five Areas of Michael Porter's Model

question 77

Essay

List and describe the five areas of Michael Porter's model that helps evaluate industries in order to determine the ones that will provide a comparative advantage.


Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the budgeted or standard cost, calculated based on hours worked and wage rates.

Labor Standards

Standards specifying the amount of time needed to complete a specific task or produce a set quantity of products.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain constant regardless of the level of production, such as salaries of managers and depreciation of factory equipment.

Standard Machine-Hours

The predetermined amount of machine time estimated or allocated for the production of a unit or batch of products, used for costing and efficiency measurements.

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