HRM 422C ARTICLE ANALYSIS – Spring 2022

1) Are the self-serve check-out machines / self-service kiosks, mostly a fixed

cost or a variable cost?

Self-service check-out machines/ Self-service kiosks are mostly a fixed cost because
once it’s installed the cost of its maintenance and establishment do not change with
each customer. It is very less variable as the cost which a organization need to spend at
the time of purchasing and installing. Also, the electricity and internet cost also included
in these.
So we can say the kiosks are mostly fixed cost and less Variable cost because after
spend the money one time it serves for long time with less maintenance and other
costs. For example in some organizations the employee who are working as cashier
need to pay some bonus or additional rewards so that they can resist with the company
but to kiosks organizations can get the lots of work for long time without giving any
rewards.

2) Would a McDonald’s employee taking orders at the counter be considered

to be a fixed cost or a variable cost? Explain.

McDonald’s Employee taking orders at the counter would be considered a variable cost
because different employees may work for that position with different shifts. For
example X employee may works for the Morning to evening shift and Y Employee may
works for evening to night shift and these both employee may have the different salary
package, different contacts with company etc. And also they have to pay the regular
monthly salary. Moreover, sometime due to the high customer traffic McDonald have to
call to the additional staff at the counter to take the order so that they can clear the
traffic and deliver the food to their customers on time and for this they have to pay
additional costs to their staff. Furthermore, Sometime company have to increase the
staff salary or give the rewards to them and these are the additional costs to the
company.

So after considering all these points we can say this is not a one time cost or fixed cost.
Because the company have to pay regular monthly salaries this is a Variable cost.

3) How does the change to using self-serve check-out machines to process a

customer’s payment or self-service kiosks to take a customer’s order,
instead of using employees to process a customer’s payment and take a
customer’s order, change a company’s breakeven point in units
(customers)? Why?

The self-serve check out machines to process customer’s payment or self service
machines to take customers order taking placing in this era as it change a company’s
breakeven point in the units (Customers) because kiosks are fixed cost as discussed
above in 2nd question’s answer. It reduced the variable costs of the employees because
it eliminate the need of more employees. Please refer to the below points why the kiosk
taking the place of employees to take orders and to take the payments –
A. Good in high customer traffic

A self-service kiosks allows reduce the high customer traffic and served for more
customers in short time. This increase more purchases at the time. These are the
quicker are convenient than the cashiers at the counter. Because due to the these
kiosks employees do not need to type the product numbers to find the rates of the
things. Employees just need to scan the products to get the final receipt.
Also since the pandemic covid 19 people likes to use the kiosks as its limits the
interaction with other people.

B. Customers likes this

Many people do not want to talk or interact with the people they go for shopping they
just select their products, go to the self-service checkouts and complete their shopping.
So they love this way of shopping.

C. No need to stay in queues for longer

If someone go out for eat for example in McDonald they no need to stay longer in
queues to the give the food order they can just go to the kiosk and choose their food
and order and sit back to food court area and chit chat and when they see their token
number they can get food and enjoy that.

D. Fewer loses of cash

Cash loses in the stores are happening due to the theft and human factors are
minimized due to the self-service because there is no longer cash handling risks.

There are some disadvantages of these self-service kiosks –

A. These kiosks can take the orders only and in case customer have any issue it
cannot assist to them. In this case a human intervention is required.
B. Some people do not know how to operate the kiosks so they change their mind
to shop from that market to other.
C. Digital kiosks ordering only system also not suitable for all customer as sometime
they have only cash option to pay but Digital kiosk ordering only do not allow
them to pay in cash.

But still advantages of kiosks are more than its disadvantages that why it change the
human with kiosks at workplaces. Kiosks are expensive but are fixed costs. Variable
costs are reduced because employee’s expenses reduced and now margin is higher.

Breakeven point = Fixed Cost/Margin

Here the fixed cost and Margin both are increased. Because the margin increased more
than fixed cost then in the result the breakeven point gets reduced.