Production How does automation affect unit costs?


Automation levels affect labor costs on a per unit basis. As a rule-of-thumb, each point of automation reduces labor cost by 10%.

Tip: Labor costs increase due to Wage Escalators.

As a rough example, if it costs you $10.00 in labor to make each unit when the automation is 3.0, increasing automation to 4.0 will reduce labor costs by about $1.00 next round (assuming equivalent First Shift/Second Shift production schedules).