Production and Cost - Production & Cost Thomas Burtons,...

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Thomas Burton’s, “Cargo Idles Off West Coast As Labor Dispute Hits Ports,” Norihiko Shirouzu’s, “Bumpy Road: As Toyota Closes In on GM, Quality Concerns Also Grow,” 1. Fixed and Variable Inputs: As defined in our textbook, in the short-run of production, firms use at least one fixed input, defined as a quantity that managers are not able to change during a particular time period. In relation to Thomas Burton’s 2002 article “Cargo Idles Off West Coast As Labor Dispute Hits Ports,” for the short-run, firms were fixed on the utilization of West Coast ports and had to brace for possible shortages and attempt to “weather the storm.” In the long-run of production, all inputs are variable, meaning that their quantities can be changed by management during a particular time period. If the closure continued, managers would have to look at the long-run and to alternatives for delivery to the West Coast Ports. Shipping cargo containers to other ports was one such option, although this could be limiting due to port capabilities, such as, many updated containers were too wide to travel through the Panama Canal. Air freight was another alternative option; however it was three times the expense of shipping cargo containers. Managers must always operate in the short-run because at any particular point in time, there is at least one fixed input in the production process,
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This note was uploaded on 11/02/2010 for the course CRN 81616 taught by Professor Poonamnath during the Spring '10 term at Georgia State University, Atlanta.

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Production and Cost - Production & Cost Thomas Burtons,...

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