Price of the Product There is an inverse negative relationship between the price of a product and the amount of that product consumers are willing and able to buy. Consumers want to buy more of a product at a low price and less of a product at a high price.
You can control some of your labor costs, but other costs will have to be borne as the market and other circumstances dictate. Location Where your company is located will impact its labor costs. Organizations that set up shop in economically depressed areas often have lower labor costs than companies located in places where the cost of living is higher.
On the other hand, if you are seeking highly skilled employees in an area that does not have an educated workforce, your labor costs might be higher as you will likely have to provide financial incentives for employees to relocate to this location. Supply and demand comes into play when you set wages, just as it does when a company is determining the price for a product or service.
If a shortage of workers exists in the field in which you do business, your company will have to pay relatively high labor costs.
Conversely, if there is a surplus of individuals who have the skills to do the work your company needs, your organization will have lower labor costs. Task Difficulty As a general rule, the more education and skills required to perform a job, the higher the labor cost will be.
Companies that must hire employees who are highly literate and have specialized skill sets will find their labor costs are higher than organizations that can quickly train employees to do simple and repetitive tasks.
Workers who have unusual combinations of skills can often command the highest wages. Efficiency When workers spend time dealing with efficiency-busters, such as poorly maintained equipment, unproductive meetings and shortages of essential materials, labor costs increase.
Inefficient scheduling that results in overtime is another culprit behind high labor costs. Even the layout of a building can affect labor costs. If employees must walk yards to carry out a task because of poor work flow planning, it will take much longer and cost much more to complete the work.
Changing the layout of a crossdocking terminal is how one company in Stockton, California, reduced its labor costs, according to John Bartholdi, director of research at the Supply Chain and Logistics Institute. Her expertise includes mentoring, serving at-risk students and corporate training.Weaker than expected demand for the latest iPhone models has prompted Apple to cut production 30%, a new report claims.
The report said Apple has reduced its planned iPhone 6s and iPhone 6s Plus.
3. supply of other factors- quantity availible of one factor of production can affect marginal product of others- say fall in supply of ladders decreases demand for apple pickers Labor supply curve reflects how workers decisions about labor-leisure trade off respond to change in opportunity cost.
Supply chains Apple and the American economy. who was Apple's worldwide supply demand manager until , but declined to discuss specifics of her work. these are self-reinforcing factors. The Supply of Other Factors The quantity available of one factor of production can affect the marginal product of other factors.
A fall in the supply of ladders, for instance, will reduce the marginal product of apple pickers and thus the demand for apple pickers. Which economic factors most affect the demand for consumer goods?
The economic factors that most affect the demand for consumer goods are employment, wages, prices/inflation, interest rates. Two Factors that Affect Labor Supply and Demand by Lee Morgan - Updated September 26, In every business that deals with a collection of employees, labor supply and demand must be a consideration by management or ownership.