In recent years, Chrysler Corporation initiated three-shift or nearly continuous (21-hours-per-day) production at a number of its plants. Explain why Chrysler's decision might have been prompted by movements in its wage costs or capital costs, or both. Why would Chrysler have instituted this production change for its most popular (and profitable) vehicles, its minivans and Jeep Cherokee? What risks might such a plan pose?
Chrysler's decision may have been prompted by rising cost of capital as this means higher cost for setting up a greenfield facility to meet the increasing demand. The decision to run continuous shifts would allow the company to utilize the excess production capacity of the ...
Discusses continuous production in Chrysler's manufacturing plants.