businesses use large quantities B u s i n e s s F i n a n c e

Discussion post 1:

Computerization and robotics have increased production per worker and, consequently, reduced unit labor costs when processing insurance claims, screening job resumes, or redeeming coupons. Personal computers have decreased the talent and time required to perform routine paperwork and time-consuming, monotonous human duties. Nevertheless, not all businesses use large quantities of PCs. Computerization and information technology have boosted productivity and lowered costs widely over other industries. An explanation appears to be improved analytical and research and development (R&D) capacity given by information technology (IT) systems and computers (McGuigan, Moyer, & Harris, 2017).

The company has variable costs related to the materials used to manufacture products (Run, 2018). But their benefit on having fewer costs is the usage of computerization. Nike has increased the cost attributed to computerization, but that is an inversion that will benefit the company because it will be a fixed cost, helping the production be more efficient and at a lower cost. For example, this is considered a fixed cost when producing a good using molding so that a per-unit cost will be divided by the number of units of products (Dumont, 2018)

The fixed cost decreased. Spending less on mold costs is a potential advantage in this industry. Nike might integrate better or automate likely AM systems, lowering labor costs by up to $3 per pair of shoes. Automation and a more straightforward, cleaner process could further support shoes being manufactured near the endpoint of sale, saving up to $3 on import duty and shipping. Additionally, a lower lead-time can decrease inventory carrying costs and enable the company to respond faster to consumer needs (Dumont, 2018).

Discussion post 2:

Adidas is one of my favorite sportswear brands and I am a returning customer for most of their footwear products. Adidas is one of the biggest brands in the world and provide their products to millions of people every year. Automation is one the key reasons as to how they were able to achieve this feet of supplying to one of the largest customer bases. They have factories all over the world which helps them with logistics and reduces the cost of manufacturing and acquiring raw materials for that region. These decisions are made based on the customer data collected by Adidas and these reports are automated as well. For the factories to stay profitable and productive, Adidas has automated all their manufacturing plants and uses machinery to not only produce shoes but also ship them with the help of machines(Hall, 2019). The basic process followed during the production of a pair of shoe are design development, comfort and size testing, material testing, producing prototypes and manufacturing the product. Out of all the aforementioned steps there could only be a minor thing that is done by humans, ie. Purchasing raw materials but apart from that everything from design to finish is done using computers and automation(Adidas, 2017). Automation reduces the overall costs as it required lesser labor and is highly productive and efficient with minimal defects or human errors. This directly increases the rate at which products are manufactured at the plant which means there is a direct increase in profits or a higher saving.

The Variable costs change when there is a change in the volume output or the number of sales made with respect to the products manufactured. These costs increase with a higher production and this remains increasing for Adidas due to the the automation of their factories. The Fixed costs remain constant as the costs included under this would be Utilities, Machinery, Rent/Lease, Employee payments, etc. As these costs are not affected by automation or computers, they remain constant and do not change.