Question

As Repairs & Operating Supplies decrease (think cheap and non-maintained buildings), you must spend more in marketing and advertising. What examples have you seen where this has impacted your decision to buy?

As labor rates per hour increase, benefit percentage increases as well (hurts) but average hourly rates and overtime decrease (helps) while productivity increases, requiring fewer associates (helps). Why do you think benefit percentages increase with increased hourly rates? Does it make sense for average hours to decrease? How come?

Answer 1

Ans

I was looking to take a rented apartment in Mumbai, India. I visited many brokers who showed me various apartments. I was intrigued by the fact that broker was promoting apartments which were not very well maintained but showing scant interest in good looking apartments. I realized this had to do with the brokerage which was higher for putting on rent a less maintained apartment. I decided to go for a well maintained apartment in posh locality with same brokerage and reasonable rent.

Benefits are directly proportional to the labor rates per hour and therefore increase with hourly rates. As labour rates per hour increase, it leads to higher productivity and lower overtime which in turn leads to lower average hours for completion.