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Labour Intensity - Operations Function
Labour intensity is defined as the ratio of the labour cost incurred to the value of the plant and equipment employed. It is important to bear in mind that it is a ratio. For example, a hospital might, at first sight, seem to be labour intensive, because of the numbers of doctors, nurses and support staff employed. However, because of the very expensive plant and equipment employed, the hospital has a low labour intensity ratio.
Demand for Caruso's Frozen Pizza (CFP) is normally distributed. The demand for CFP averages 400 per day with a standard deviation of 200. Weekly demand (5 days) averages 2,000 unit
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What due diligence should be performed before signing a contract?
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