ARTEMIS SPORTSWEAR COMPANY

Artemis Sportswear Company [hypothetical] has experienced downward pressures on profit margins. Company management has ordered an assessment of factors affecting the company's productivity with an end objective of reducing operational expenses and, in turn, increasing profit margins.

Because Artemis Sportswear Company is not a real company, primary sources concerning the company's operations cannot be cited in this analysis. Operational data and other information attributed to the hypothetical company in this analysis reflect an amalgam of data relevant to real companies engaged in sportswear manufacturing.

The source of much of the pressures on profit margins at Artemis Sportswear Company is centered in the cost of goods sold, as opposed to marketing or administrative expenses. Within the cost of goods sold classification, the principal source of cost anomalies appears to be labor costs, when comparisons are made in relation to the company's competitors.

Thus, the thesis of this cost and profit analysis is that, in order to improve profit margins, the company must reduce direct labor costs. The question that must be answered then concerns the most appropriate strategy through which such cost reductions may be realized. The two principal options are (a) reducing domestic direct labor costs or (b) transferring production to lower cost foreign locations.

. . .
ts efforts to develop a strategy that will enable the company to reduce operating costs and increase profit margins. Essentially, productivity must increase at the company. Such an increase may be attained through (a) increased application of cost-effective technological innovations, (b) reduced labor costs applicable to the existing workforce, (c) reductions in the workforce while maintaining production output levels, (d) movement of manufacturing operations to lower cost area, or (e) some combination of these options. Innovation, in an economic context, is the introduction of new products or production processes (Ekelund & HTbert, 1998). Innovation, thus, is technological change (Byrns & Stone, 2003). Technological change may involve improvements to non-human resources or new knowledge about how to combine resources. Many technological innovations that lead to new processes and greater economic efficiency are related to improved ways to use energy. Early in the twenty-first century people are accustomed to thinking of technological innovations within the context of high technology, or high tech. Over the years, however, low technology, or low-tech, innovations involving improved ways to use energy also have led to grea
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Approximate Word count = 2278
Approximate Pages = 9 (250 words per page)

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