Always Round Tire Tries to Base Its Promotions on Seniority

question 35

Essay

Always Round Tire tries to base its promotions on seniority (where education and training requirements are not necessary).The company finds that this system seems to work most of the time with shop-floor supervisors and team managers.However,the system breaks down for higher-level positions.Why?

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Definitions:

MC

Marginal Cost, the increase in total cost that arises from producing one additional unit of a product or service.

Total Variable Cost

Total Variable Cost is the sum of all costs that vary with the level of output produced, such as materials and labor.

Total Fixed Cost

The total of all expenses that do not change with production volume or output in the short term, for example, lease payments or wages.

Output of Zero

A theoretical condition or benchmark where no goods or services are being produced or output is completely halted.