1. Joanne owns a bakery that has been in business for over three years. Lately, she's hasn't been making much profit, so she's looking at ways to make her business more productive. Help her complete her analysis by reviewing the following information about her company and answering the questions.
Number of employees: 10
One head baker and nine general employees who assist with baking, cleaning, stocking inventory, working the register, and merchandising.
Joanne and the head baker often have to tell the other employees what to do when they arrive for their shifts.
Employees have to check in with Joanne when they're done with a task to know what to do next.
Types of goods baked: Cakes, cupcakes, cookies, pies, doughnuts, scones, and muffins
a) How might specialization, or division of labor, help Joanne make her business more productive? (3 points)
b) How might specialization lead to comparative advantage for Joanne's bakery? (3 points)
c) Imagine Joanne has an employee, Cynthia, whose only job is to restock shelves in the kitchen. Whenever Cynthia is busy she has to bend, twist, and lift to put items on the shelves over and over. Whenever she's done with her task, she often waits around for the next shipment of baking supplies to come in. How can this sort of specialization be a detriment to productivity? (3 points)
d) How could Joanne implement the concept of economies of scale in her bakery? (3 points)
e) How might the law of diminishing returns affect Joanne's bakery? (3 points)
answer each part briefly
a) Specialization, or division of labor, can help Joanne make her bakery more productive by allowing each employee to focus on a specific task that they excel at and can perform efficiently. This can save time and increase output as employees become more skilled and experienced in their specialized roles.
b) Specialization can lead to comparative advantage for Joanne's bakery by allowing each employee to become an expert in their specific area of work. This can result in higher quality products, increased efficiency, and a competitive advantage over other bakeries that do not specialize.
c) This sort of specialization can be a detriment to productivity because it restricts Cynthia to a single task and limits her ability to help with other tasks when needed. This can lead to inefficiencies and bottlenecks in the workflow, as other employees may have to wait for Cynthia to finish restocking before they can proceed with their own tasks.
d) Joanne can implement the concept of economies of scale in her bakery by increasing her production levels to take advantage of cost savings that come with producing in larger quantities. This can involve purchasing ingredients and supplies in bulk, streamlining production processes, and potentially expanding her customer base to increase sales volume.
e) The law of diminishing returns could affect Joanne's bakery if she reaches a point where adding more employees or equipment does not result in a proportional increase in output or productivity. This could occur if the bakery becomes overcrowded or if resources are not properly allocated, leading to inefficiencies and diminishing returns on Joanne's investments.