Question

Given that hiring and paying asset-protection customer specialists at all stores will push up Walmart's labor costs, what is McMillon assuming about the cost savings that can be yielded by reducing Walmart's shrink?

Short answer

The whole fixed and variable costs of producing one more unit are included in the marginal cost. The cost of gasoline, The cost of exploration, as well as radiation protection.

Step-by-step solution

Intoduction.

The gain realized from activities that reduce an organization's overall spending on assets that directly affect its bottom line is referred to as cost savings.

Cost-cutting measures can include everything from increasing efficiency to attempting to negotiate lower supply-purchase pricing.

Reason for the cost savings that can be yielded by reducing Walmart's shrink. 

The marginal cost includes all fixed and variable costs associated with producing an extra unit. The hereunder are the most likely marginal cost expenditures:

• The price of gasoline
• The expense of exploration
• Radiation protection costs