Question

BMW recently decided to build a manufacturing plant in Shenyang, China. At this plant, BMW is able to take advantage of paying lower wages to its Chinese workers than it pays its German workers, but it also sacrifices the high levels of technical training possessed by its German workers. In deciding to open the Shenyang plant, BMW _____.

Answer 1

Answer:

B. faced a trade-off between higher cost and lower precision.

Explanation:

BMW in expanding manufacturing plant to China had to make a decision between higher cost of production and lower precision. This is common amongst big companies expanding abroad. Sometimes the are faced with this trade off decision of cheap labour over technical efficiency. Where they are expanding to usually have cheap labour ready for work but with little or no technical expertise that the company is used to. As a result of this, there's usually a trade off between higher cost and lower precision.