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This paper explores the economic determinants of the psychological manifestation of cognitive load in supervisors in sourcing factories. The questions addressed in this thesis are: 1. How do late delivery penalties implemented by the buyer affect the stress level of the supervisor in the sourcing factories? 2. How does the stress level of the supervisor influence the amount of verbal abuse the ... read moreworkers in the factory are subjected to? 3. How does this use of verbal abuse, affected by the delivery penalty, affect both wages and productivity? The purpose of answering these questions is to analyze the proposed business case for delivery penalties. Through the creation of a theoretical model and regression analyses, the results disprove the possibility of a business case.read less
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