Jones Sticky Labels (JS) JS is a private limited company that produces sticky labels for the industrial market. JS was set up by Lucy Jones 15 years ago. The market for sticky labels is very specialised and there are no competitors within the home country because of low demand. However, the majority of JS's customers are in other countries and the international market is much more competitive. JS owns one factory where all the sticky labels are manufactured. The business employs 300 workers on eight production lines. The sticky labels are designed using Computer Aided Design (CAD) and manufactured using batch production. When a customer wants sticky labels, JS will create a new design, send the design to the customer for approval and then order the materials required for production. Each design of sticky label is unique and will take different amounts of time and effort to produce. The typical lead time is four weeks. One of JS's customers is a supermarket chain which puts sticky labels on many of its products. These range from promotional sticky labels that are put on products that need to be sold quickly through to small sticky labels that are put on fruit to identify their variety. JS has recently received an order from the supermarket chain for 50000 sticky labels at a total price of $2750. The costs of producing these labels is shown in Table 1. Table 1: Cost data ($) Variable Costs: Cost of materials (per 1000 sticky labels) 5 Cost of labour (per 1000 sticky labels) 15 Fixed Costs: Administration cost 500 Other allocated fixed costs 1000 The employees at JS are currently paid an hourly wage. Many employees object to this payment method because some jobs have worse working conditions than others and those who put more effort into their work are not rewarded. The employees have threatened to take action if a more suitable payment method is not introduced.