Management of a manufacturing unit is considering extensive modernisation of the factory through progressive mechanisation which would result in improved productivity and reduced strength. Through...

Management of a manufacturing unit is considering extensive modernisation of the factory through progressive mechanisation which would result in improved productivity and reduced strength. Through negotiations with the union, it was agreed that for every 1 per cent increase in productivity, workers would be paid 0.5 per cent incentive wages. It was also agreed that through voluntary retirement, the staff strength would be reduced to 300 from the present level of 400. The following further comparative data are available before and after the proposed mechanisation: