Manpower Cost Analysis for PT6 Engine Overhaul - Essay Example

The paper "Manpower Cost Analysis for PT6 Engine Overhaul" is a good example of an essay on business. Cost analysis is used to determine the most appropriate cost for labor or any business venture. Mostly cost analysis is used when evaluating the real cost of service or product. Manpower involves planning for staff levels in regard to the present and future requirements of any given organization. In this report, we analyze the labor cost for overhauling the PT6 engine facility in Qatar airways. The PT6 is among the most popular airplane engines in the world. The report looks at the data collected at Qatar airways to determine the most feasible solution to contracting manpower for this facility.

Analysis

            The analysis looks at two options of manpower that can be contracted to do this work on this facility. The feasibility of contracting each is also examined. The cost analysis will also determine how many of each category will be contracted to this facility. The manpower is divided into two categories; this consists of certified engineers and technicians. There are also two types of contracts available for the technicians, a permanent contract or a subcontract. The permanent contract or full contract is when the company fully employs the technician. The subcontract, on the other hand, is when the company contracts another company for the provision of labor.

            From the data collected, the subcontract for the technicians is viewed as the preferred option from the two. This is concluded from the premise that sub-contractors cost less to hire and maintain because they do not receive allowances. Because their contract is not on a full-time basis, perks like accommodation and insurance are not the responsibility of the company. This option is also better for the company because the subcontracted team will provide all the services for the airline, instead of the airline looking for specialized technicians for different jobs.

            Hiring full contract technicians will cost the company more because the airline will be responsible for the accommodation of the technicians, their health insurance and their annual ticket for traveling. This will inadvertently cost more to the company than beneficial. Therefore, this choice is not regarded as the best for the technician. The cost of overtime of the full-time contractor is also higher than a sub-contractor.

            Certified engineers are the most costly to the airline. The work they would perform can be handled by the technicians and the company will not need to employ them for the overhauling facility. They require a higher basic salary and a housing allowance, as well. The company is also obligated to provide accommodation and transport for them. Under their benefits, the company is also paying school fees for certified engineers. If the engineers have children below 18, the airline is to pay travel tickets for them, as well as the engineers. These costs are deemed unnecessary for the airline, and the option of contracting certified engineers is not considered.

Conclusion

            In the labor cost analysis, a company finds the most affordable way to acquire labor without accruing unnecessary costs. After statistical analysis, it is determined that the best labor choice is the subcontracted technicians.