Effect of overtime application on labor cost: Make-to-order production company sample

The companies should keep control of their profit and loss levels, in order to perform their crucial functions. Because of this, the workouts of detecting and analyzing costs are very important. The labor cost, which takes the most significant role in a company?s cost items, has to be very carefully managed.Moreover, in companies, producing due to orders, controlling cost is a bit more difficult especially when it comes to special-design products. Due to the quality of the work, some latencies may occur in different departments of the company and these latencies may affect labor cost negatively when they are recovered by working overtime.In this thesis, the relations of working overtime in order to recover the latencies in companies, producing due to orders, with the departments will be revealed and in addition to this, the social cost of working overtime will be covered. The sample mathematical model, explaining the relation of overtimes in working with the latency fines, and the data obtained from it will be given.Key Words: Employee Cost, Overtime, Make to Order Produce, Social Cost