Question

You are the manager of two plants (factories) in Mexico that manufacture shoes. The combined monthly output of both plants is to be 10,000 pairs of shoes. Explain, based on your understanding , how you would best divide this output of 10,000 pairs of shoes between the two plants.

Answer 1

Given that both factories together produce 10,000 pairs of shoes, and both carry out the entire production process of the same in an identical way, if I were the manager of the same, I would distribute the benefits of what is produced by both factories in the following way: 50% of them equally, 25% for each one; and the other 50% in proportion to what each one has actually produced. Thus, it would guarantee that both receive income and, at the same time, it would encourage production by the one that generated the most income.