Question

Maria is an industrial engineer at a Nissan plant. Indicate how Maria should change her production plans in respo
change in market conditions.
a. An engine supplier decreases the price it charges Nissan by 50%.
As a result, Nissan's cost of production will _____
and Nissan should _____
its supply.
b. Workers unionize and demand a 12% across-the-board raise.
As a result, the cost of production will ______
and Nissan should ____
its supply.

Answer 1

This is how Maria, as an industrial engineer at a Nissan plant, should change her production plans to respond to market changes:

• a. Nissan's cost of production will decrease and Nissan should increase its supply by manufacturing vehicles.

• b. With the demand for a 12% across-the-board raise by the Workers' Union, the cost of production will increase and Nissan should reduce its supply.

• But this production choices are not Maria's to make.  They are made by the senior management of Nissan at the Headquarters.

Thus, the senior management can alter production plans in response to changes in market conditions when the changes are substantial.

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