change in man machine ratio with technological advances resulting in change of cost structure.
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Change in man machine ratio to get technological advantage in any business effect cost structure both positive & negative ways depends upon the nature of business & current market conditions always .
In most of cases it helps to get good profit over the time like there will be less expenditure on Recruitment , PF , Medical expanses & professional taxes by reducing manpower whereas machine may get out of version or may cost reduced later in market to purchase too low than expected then there will be loss in cost calculation . Sometime management may face stiff challenge from worker union due to huge lay off .Also there is installation cost is high initially . which may effect production for few month & put hold on profit on production & sales .
In most of cases it helps to get good profit over the time like there will be less expenditure on Recruitment , PF , Medical expanses & professional taxes by reducing manpower whereas machine may get out of version or may cost reduced later in market to purchase too low than expected then there will be loss in cost calculation . Sometime management may face stiff challenge from worker union due to huge lay off .Also there is installation cost is high initially . which may effect production for few month & put hold on profit on production & sales .
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