Six Cost Centers in Shoe Manufacturing Company - Essay Example

The maintenance cost center also contributed to it because apparently, some tools and machines are not doing their jobs right because they are ill-maintained and broken. The fixing and acquisition of new tools and machines will again entail cost.

Another root cause of the poor quality of the shoes is the lack of skilled workers in the production area. We are able to trace it back to the lack of training and hiring of unskilled workers which are at the cost center of human resources. This is aggravated by the fact that employees felt they are not compensated well which would potentially increase labor costs.
The issues are intertwined and are affecting six cost centers in the company. It started with poor procurement processed by defective machines which are done by underperforming human resources resulting in defective and poor products that customers are not satisfied with and hence are the returns. Read More