PYG is a private limited company based in country A. PYG makes metal cans for food products using flow production. The Operations Director has been looking at the operations data in the Table. Last year PYG found it difficult to replace the 15 production workers who left the company. Most of PYG’s output is exported. The Operations Director thinks there could be more advantages than disadvantages to relocating production to another country.
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15 Do you think that the advantages of relocating production to another country would be greater than the
disadvantages for PYG? Justify your answer. [6]
Possible KN Points:
• Cost of land/rent might be cheaper/higher
• Recruitment issues/suitability of
workers
• Distribution/transport issues e.g.
road access
• Access to raw materials
• How important are labour costs in
relation to total costs (i.e. what would be saved)
• Legal controls
• Level/any Government support available
• Communication problems
• Labour/trade union response