A company in the Midwest produces special purpose heavy-duty electric motors used in machine tools. The company employs 1,025 workers in all.
The management of the company wants to move the low-tech, labor-intensive part of its operation to Mexico to take advantage of the low cost of labor there.
If the company moves its operations to Mexico, 168 workers will lose their jobs at the current location. The expected cost saving is estimated to be $1 million in the first year and $2 million in subsequent years, for nine years.
Analyze the two alternatives of moving and not moving operations to Mexico. Write a report of your analysis. Your report should focus on:
- Structuring the problem with objectives and consequences
- Comparing the alternatives and tradeoffs