Question

SUBJECT: GAME THEORY

Prior to just-in-time production techniques the Big 3 automakers would run shifts overtime just prior to wage negotiations so as to build up stockpiles of supplies. These firms were

A)Trying to increase the amount of time they could sustain a strike.

B) Trying to reduce their sweat factor.

C) Both of the above.

D) None of the above.

Answer 1

The answer is (a) Trying to increase the amount of time they could sustain a strike. By running shifts over time and building a stockpile of suppliers, the firm can serve the market for longer in times fo reduced production due to in-time production techniques. Thus, it can survive the strike for longer without much damage.

(b) is wrong as reducing sweat factor means improving productivity which is not the aim of the firms here.

(c) and (d) are wrong as only (a) is true