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Automation and choosing variable and fixed costs

Businesses often decide between using automation and labor in production. An automotive environment may have high fixed costs and low variable costs; for example, and an industry that utilizes manual labor for production will have low fixed costs and high variable costs. How would you describe the balance between the costs of automation, or fixed costs and the costs of labor, or variable costs? How has the Internet changed the balance between automation and labor?

Solution Preview

If managers can show the cost effectiveness of automation they can then proceed forward. Automation does help to eliminate recruiting, training, workers' compensation claims, and medical benefits. Of course, how long the company is willing to wait on the return on investment (ROI) for automation depends on the organizations financial situation. ...

Solution Summary

This solution solves the problem in choosing between variable and fixed costs.

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