In my opinion, the cost of robots is fixed because once the expenditure is done to purchase, there is no other additional expenditure (expect cost incurred for their upkeep and maintenance). In addition, when using robots, costs do not change with an increase or decrease in the number of goods or services produced or sold by Walmart stores (Robert et al.). Therefore, there are no variable costs due to robots usage in most Walmart stores.
The cost of full-time hourly employees will mainly behave as a variable cost because the increase or decrease in the number of goods or services sold or produced will affect the company’s expenditures. For example, if the number of goods being unloaded from a truck has been increased, full-time employees will work for more hours, rising prices (Robert et al.). Additionally, considering part-time hourly employees will not change variable costs since there will be an increase or decrease in the company’s expenses.
Since robots incur a fixed cost, it will ensure that Walmart reaches a breakeven point where its total cost and total revenue will be equal. In addition, the robots will ensure that the breakeven point is not easily affected regardless of the situation that the company faces (Robert et al.). This is unlike hourly employees, where the breakeven point is affected by a minor issue. For instance, an increase in goods purchased will increase the expenditures and lead to an increase in total cost.
The advantages of using robots are: they are more accurate than employees, are time-saving, reduce the company’s expenditures, and work more hours than employees.
Robert, Lionel et al. “A Review of Personality in Human‒Robot Interactions”. SSRN Electronic Journal, 2020. Elsevier BV, Web.