Question;PRODUCTIVITY;1.;Suppose that a company produced 300;standard bookcases last week using eight workers and it produced 240 standard;bookcases this week using six workers. In which period was productivity higher?;Explain.;2.;The manager of a crew that installs carpeting;has tracked the crew?s output over the past several weeks, obtaining these;figures;Compute the labour productivity for each of the weeks.;On the basis of your calculations, what can you conclude about crew size and;productivity?;3.;Compute the multifactor productivity;measure for each of the weeks shown. What do the productivity figures suggest?;Assume 40-hour weeks and an hourly wage of $12. Overhead is 1.5 times weekly labour;cost. Material cost is $6 per pound. Standard price is $140 per unit.;4.;A company that makes shopping carts for;supermarkets and other stores recently purchased some new equipment that;reduces the labour content of the jobs needed to produce the shopping carts.;Prior to buying the new equipment, the company used five workers, who produced;an average of 80 carts per hour. Labour cost was $10 per hour and machine cost;was $40 per hour. With the new equipment, it was possible to transfer one of;the workers to another department, and equipment cost increased by $10 per hour;while output increased by four carts per hour.;a.;Compute labour productivity under each;system. Use carts per worker per hour as the measure of labour productivity.;b.;Compute the multifactor productivity under;each system. Use carts per dollar cost (labour plus equipment) as the measure.;c.;Comment on the changes in productivity;according to the two measures, and on which one you believe is the more;pertinent for this situation.;5.;An operation has a 10 percent scrap rate.;As a result, 72 pieces per hour are produced. What is the potential increase in;labour productivity that could be achieved by eliminating the scrap?;6. A;manager checked production records and found that a worker produced 160 units;while working 40 hours. In the previous week, the same worker produced 138 units;while working 36 hours. Did the worker?s productivity increase, decrease, or;remain the same?Explain.;7.;The following table shows data on the;average number of customers processed by several bank service units each day.;The hourly wage rate is $25, the overhead rate is 1.0 times labour cost, and;material cost is $5 per customer.;Unit;Employees Customers;processed;A;4;36;B;5;40;C;8;60;D;3;20;a. Compute;the labour productivity and multifactor productivity for each unit;b. Suppose;a new, more standard procedure is to be introduced that will enable each;employee to process one additional customer per day. Compare the expected;labour and multifactor productivity rates for each unit.For multifactor productivity assume an;8-hour day.;8.;Two types of cars (Deluxe and Limited) were;produced by a car manufacturer in 2008.Quantities sold, price per unit;and labour hours follow. What is the labour productivity for each car? Explain;the problem associated with the labour productivity.;9.;A U.S. manufacturing company;operating a subsidiary in an LDC (less developed country) shows the following;results;a.;Calculate partial labour and capital;productivity figures for the parent and subsidiary. DO the results seem;misleading?;b.;Compute the multifactor productivity;figures for labour and capital together. Are the results better?;c.;Calculate raw material productivity;figures (units/$ where $1 = FC 10). Explain why these figures might be greater;in the subsidiary.;10. A;fast-food restaurant serves hamburgers. cheeseburgers, and chicken sandwiches.;The restaurant counts a cheeseburger as equivalent to 1.25 hamburgers and;chicken sandwiches as 0.8 hamburger. Current employment is five full-time;employees who work a 40-hour week. If the restaurant sold 700 hamburgers, 900;cheeseburgers, and 500 chicken sandwiches in one week, what is its;productivity? What would its productivity have been if it had sold the same;number of sandwiches (2,100) but the mix was 700 of each type?;11. As;operations manager, you are concerned about being able to meet sales requirements;in the coming months. You have just been given the following production report.;Find the average monthly productivity (units per;hour).;12. Sailmaster;makes high-performance sails for competitive windsurfers. Below is information;about the inputs and outputs for one model, the windy 2000.;Calculate the productivity in sales revenue/labour expense.;13. Acme;Corporation received the data below for its rodent cage production unit. Find;the total productivity.;14. Various;financial data for 2007 and 2008 follow. Calculate the total productivity;measure and the partial measures for labour, capital, and raw materials for;this company for both years. What do these measures tell you about this;company?;15. An;electronics company makes communications devices for military contracts. The;company just completed two contracts. The navy contract was for 2,300 devices;and took 25 workers two weeks (40 hours per week) to complete. The army;contract was for 5,500 devices that were produced by 35 workers in three weeks.;On which contract were the workers more productive?;16. A;retail store had sales of $45,000 in April and $56,000 in May. The store;employs eight full-time workers who work a 40-hour week. In April the store;also had seven part-time workers at 10 hours per week, and in May the store had;nine part-timers at 15 hours per week (assume four weeks in each month). Using;sales dollars as the measure of output, what is the percentage change in;productivity from April to May?;17. A;parcel delivery company delivered 103.000 packages in 2007, when its average;employment was 84 drivers. In 2008 the firm handled 112,000 deliveries with 96;drivers. What was the percentage change in productivity from 2007 to 2008?;18. The Big;Black Bird Company (BBBC) has a large order for special plastic-lined military;uniforms to be used in an urgent military operation. Working the normal two;shifts of 40 hours, the BBBC production process usually produces 2500 uniforms;per week at a standard cost of $120 each. Seventy employees work the first;shift and 30 the second. The contract price is $200 per uniform. Because of the;urgent need, the BBBC is authorized to use around-the clock production, six;days per week. When each of two shifts works 72 hours per week, production;increases to 4000 uniforms per week but at a cost of $144 each.;a) Did the;productivity ratio (in monetary terms) increase, decrease, or remain the same? If;it changed, what percentage did it change?;b);Did the labour productivity ratio;increase, decrease, or remain the same?If it changed, by what percentage did it change?;c) Did;weekly profits increase, decrease, or remain the same?;19. Mance;Fraily, the Production Manager at Ralts Mills, can currently expect his;operation to produce 1000 square yards of fabric for each ton of raw cotton.;Each ton of raw cotton requires 5 labour hours to process. He believes that he;can buy better quality raw cotton, which will enable him to produce 1200 square;yards per ton of raw cotton with the same labour hours.;What will be the;impact on productivity (measured in square yards per labour-hour) if he;purchases the higher quality raw cotton?;20. C. A.;Ratchet, the local auto mechanic, finds that it usually takes him 2 hours to;diagnose and fix a typical problem. What is his daily productivity (assume an 8;hour day)?;Mr. Ratchet;believes he can purchase a small computer trouble-shooting device, which will;allow him to find and fix a problem in the incredible (at least to his;customers!) time of 1 hour. He will, however, have to spend an extra hour each;morning adjusting the computerized diagnostic device. What will be the impact;on his productivity if he purchases the device?;21. Natalie Attire makes fashionable garments.During a particular week employees worked 360 hours to produce a batch of 132 garments, of which 52 were ?seconds? (meaning that they were flawed). Seconds are sold for $90 each at Attire?s Factory Outlet Store. The remaining 80 garments are sold to retail distribution, at $200 each. What is the labour productivity ratio of this manufacturing process?;22. Mance;Fraily, the Production Manager at Ralts Mills, can currently expect his;operation to produce 1000 square yards of fabric for each ton of raw cotton.;Each ton of raw cotton requires 5 labour hours to process. He believes that he;can buy a better quality raw cotton, which will enable him to produce 1200;square yards per ton of raw cotton with the same labour hours.;What will be the;impact on productivity (measured in square yards per labour-hour) if he;purchases the higher quality raw cotton?;23. Joanna;French is currently working a total of 12 hours per day to produce 240 dolls.;She thinks that by changing the paint used for the facial features and;fingernails that she can increase her rate to 360 dolls per day. Total material;cost for each doll is approximately $3.50, she has to invest $20 in the;necessary supplies (expendables) per day, energy costs are assumed to be only;$4.00 per day, and she thinks she should be making $10 per hour for her time.;? Viewing;this from a total (multifactor) productivity perspective, what is her;productivity at present and with the new paint?;(assumption: paint costs the same amount);? How;would total (multifactor) productivity change if using the new paint raised Ms.;French?s material costs by $0.50 per doll?;? If she;uses the new paint, by what amount could Ms. French?s material costs increase;without reducing total (multifactor) productivity?;24.;Last week employees;at Bluegill produced 46 chairs after working a total of 200 hours. Of the 46;chairs produced, 12 were damaged due to a problem with the new sanding machine.;The damaged chairs can be discounted and sold for $25 each. The undamaged;chairs are sold to a department store retail chain for $70 each. What was the labour;productivity ratio for last week? If labour productivity was $15 in sales per;hour the previous week, what was the change in labour productivity?;25.;Yesterday, the employees at Stix produced;46 chairs. Of the 46 chairs produced, 12;were damaged due to a problem with a new sanding machine. The damaged chairs can be discounted and sold;for $25 each. The undamaged chairs are;sold to a retail chain for $70 each.;Labor costs were $720, material costs were $460, and overhead costs were;$500. What was the multi-factor;productivity?;26. Max?s;Performance Auto modifies 375 autos per year.;The owner, Max Magee, is interested in obtaining a measure of overall;performance. He has asked you to provide;him with a multi-factor measurement of last year?s performance as a benchmark;for future comparison. You have;assembled the following data. Resource;inputs were: labor, 10,000 hours, 300 engine modification kits, 200 suspension;kits, and energy, 100,000 Kilowatt-hours.;Average labor cost last year was $20 per hour, engine kits cost $1,500;each, suspension kits cost $1,000 each, and energy costs were $3 per;Kilowatt-hour. What do you tell Max?;27. A;company has introduced a process improvement that reduces processing time for;each unit so that output is increased by 25% with less material but one;additional worker required.;Under the;old process, five workers could produce 60 units per hour. Labor costs are;$12/hour, and material input was $16/unit. For the new process, material is now;$10/unit. Overhead is charged at 1.6 times direct labor cost. Finished units;sell for $31 each.;a);Compute single factor productivity of;labor in the old system. (Compute it in four possible ways.);b);Compute all factor productivity for both;old and new systems.;Factor Old System New;System;Output 60 60(1.25);= 75;# of workers 5 6;Worker cost $12/hr $12/hr;Material $16/unit $10/unit;Overhead 1.6(labor cost) 1.6(labor;cost);Price 31 31;28. A milk;factory seeks advice from an external consulting company concerning its;business and production processes. The final consulting report describes;several steps to increase productivity including implementation of cutting-edge;processing techniques through more powerful filtering systems.;ExistingSystem;ProposedSystem;Workers;12;9;MilkOutput/hour;1,000 gallons;1,400 gallons;Wage Rate/hour;$12;$12;FiltrationCost/hour;$120;$170;a);Calculate the labor productivity for the;existing as well as the proposed system.;b);Find the All-Factor Productivity for both;systems.;c);Assume that current processing includes;700 gallons of Grade-A milk sold at $2.40/gallon and 300 gallons of Grade-B;milk at $1.90/gallon. Furthermore, assume that under the proposed system;processing will include 600 gallons of Grade-A milk at $2.40/gallon and 400 gallons of Grade-B;milk at $1.90/gallon. Compare all-factor productivity for both the existing and;the new system.;29. Argo;Company has a large order for had-made chairs. Working the normal two shifts of;40 hours, Argo usually produces 2500 chairs per week at a standard cost of ?120;each. Seventy employees work the first shift, and 30 employees work the second;shift. The contract price is ?200 per;chair. Because of the urgent need, Argo;is authorized to use around-the-clock production, six days per week. When each;of the two shifts works 72 hours per week, production increases to 4000 chairs;per week but at a cost of ?144 each.;Did the multifactor productivity ratio increase;decrease, or remain the same? If it changed, by what percentage did it;change?Did the labour productivity ratio increase;decrease, or remain the same? If it;changed, by what percentage did it change?Did weekly profits increase, decrease, or remain;the same?;30.???;?????????????????????????????????????????????? Neonakis A.E.,???????????;200??????????????? 46????????.?????????? 12??????????????????????;?????????????????????????????????????.????????????????????????????;?????????????????????????? ?25????????,????????????????????????;????? ?70????.???????????????????????????????????????????????????;??????????????????????????????????????????? ?15??????????,?????????;???????????????????????????????????????? [??? ?15???????? ?13.4,???;????????????????????????????? 10.67%];31. Suds;and Duds Laundry washed and pressed the following numbers of dress shirts per;week.;Week;Work Crew;Hours;Shirts;1;Sud and;Dud;24;68;2;Sud and;Jud;46;130;3;Sud;Dud, and Jud;62;152;4;Sud;Dud, and Jud;51;125;5;Dud and;Jud;45;131;a.;Calculate the labour productivity ratio;for each week.;b.;Explain the labour productivity pattern;exhibited by the data.;32. Compact;disk players are produced on an automated assembly line. The standard cost of;compact disc players is ?65 per unit (labour ?5, materials, ?20, and overhead;?40). The ?5 labour cost comes from 15;minutes of labour per CD player, valued at ?20 per hour. The sales price is;?100 per unit. (a) Compute the labour productivity, (b) Compute the value-added;labour productivity.;To achieve a 10% multifactor productivity;improvement by reducing materials costs only, by what % must those costs be;reduced?;To achieve a 10% multifactor productivity;improvement by reducing labour costs only, by what % must those costs be;reduced?;To;achieve a 10% multifactor productivity improvement by reducing overhead costs;only, by what % must those costs be reduced?;10.;33. Drop;Inn is an economy motel in western South Dakota;that serves the Black Hills area. They have 45 rooms for rent. Some of the;rooms have luxury features and are more expensive and the Inn;participates in several discounting programs. Below is a table of single night;room rentals in various amounts. The number rented is for the month just;finished.;Quantity;Renenue;(price charged);162;?29,95;78;?32,95;205;?35,45;314;?39,95;82;?45,95;37;?49,95;45;?59,95;The;motel has a crew of 7 employees who worked the following number of hours at the;given wage.;Arvin;200;?4.065;note, on salary, this is wage per month;Tom;112;?11,50;per;hour;Joice;97;?12,50;per;hour;Stephanie;52;?7,50;per;hour;Debbie;47;?7,50;per;hour;Carl;42;?6,15;per;hour;Pat;34;?5,45;per;hour;Other expenses;were;Utilities;?3.678;Supplies;?1.782;Depreciation;?5.900;What;was the multifactor productivity for the Drop Inn last month?;34. A crew;of 3 workers can unload the luggage on an airplane and place it on the pickup;conveyor in a total of 14 minutes, start to finish. The average number of items;of luggage per plane is 92.;What is the time for the crew to unload the;plane?What is the rate at which the crew unloads;planes?What is the unload time for the crew expressed;per luggage item?What is the unload time per luggage item per crew;member assuming that the work is evenly divided among the 4 workers?;35. Collins Little Company has a stuff of 4, each;working 8 hours per day (for a payroll cost of ? 640 / day) and overhead;expenses of ? 400 / day. Collins processes and closes on 8 titles each day. The;company recently purchased a computerized title search system that will allow;the processing of 14 titles per day. Although the staff, their works hours, and;pay will be same, the overheads expenses are now ? 800 per day.;36.;Sergio Farmerson makes;billiard balls in his famous Boston;plant. With recent increases in his costs, he has a new-found interest in;efficiency. Sergio is interested in determining the productivity of his;organisation. He would like to know if his organisation is maintaining the;manufacturing average of 3% increase in productivity. He has the following data;representing a month from last year and an equivalent month this year.;Last Year This Year;Units produced 1 000 1 000;Labour (hours);300 275;Resin (kgs) 50 45;Capital invested (?) 10 000 11;000;Energy (kw) 3 000 2 850;Show the productivity change for;each category and then determine the improvement for labour hours, the;typical standard for comparison.Sergio determines his cost to be;as follows:?;Labour 10;?/hour;?;Resin 5;?/kg;?;Capital 1%;per month of investment;?;Energy 0.50;?/kw;Show the productivity change, for one month last year versus;one month this year, on a multifactor basis with money units (?) as the common;denominator.;37. The manager of a carpet store is trying to determine;optimal installation crew size. He has tried various crew sizes with the;results shown below. Compute the average labour productivity for each;crew size. Which crew size do you recommend?;Crew Size;Meters Installed;2;706;4;1 308;3;1 017;3;1;002;4;1 288;2;692;The weekly output of a production process is shown below, together with;data for labour and material inputs. The standard inventory value of the output;is 125 ?/unit. Overhead is charged weekly at the rate of 1500 ? plus0.5;times direct labour cost.;Assume a 40-hr/ week and an hourly wage of 16 ?. Material cost is 10 ?;per running meter.Compute the average multi-factor productivity for;this process.;Week;Output;# workers;Material (meters);1;412;6;2840;2;364;5;2550;3;392;5;2720;4;408;6;2790;38. A company has introduced a process improvement that;reduces processing time for each unit, so that output increased by 25%;with less material, but oneadditional worker required.;Under the old process, five workers could produce 60;units/ hours. Labour costs are 12 ?/ hours, and Material costs (input) was;previously 16 ?/unit. For the new process, material is now 10 ? / unit.;Overhead is charged at 1.6 times direct labour cost. Finished units sell for 31;? each. What increase in productivity is associated with the process;improvement?;39. Suzan has a part-time ?cottage industry? producing;seasonal plywood yard ornaments for resale at local craft fairs and bazaars.;She currently works a total of 4 hours per day to produce 10 ornaments.;a);What is her productivity?;b);She thinks that;by redesigning the ornaments and switching from use of wooden glue to a;hot-glue gun she can increase her total production to 20 ornaments per day.What is;her new productivity?;c) What is her percentage increase in productivity?;40. Suzan?s Ceramics spent 3000 ? on a new kiln last;year, in the belief that it would cut energy usage 25% over the old kiln. This;kiln is an oven that turns ?green ware? into finished pottery. Suzan is;concerned that the new kiln requires extra labour hours for its operation.;Suzan wants to check the energy savings of the new oven and also to look other;measures of their productivity to see if the change really was beneficial.Suzan;has the following data to work with;Last Year;This year;Production (finished units);4 000;4 000;Green ware(kgs);5 000;5 000;Labour (hours);350;375;Capital (?);15 000;18 000;Energy (kWh);3;000;2 600;Were the;modifications beneficial?;41. The;output of a process is valued at ?100 per unit. The cost of labour is ?10 per;hour invluding benefits. The accounting department provided the following;information about the process for the past four weeks;Week 1;Week 2;Week 3;Week 4;Units produced;1124;1310;1092;981;Labour, ?;12735;14842;10603;9526;Material, ?;21041;24523;20442;18364;Overhead, ?;8992;10480;8736;7848;Use the total factor productivity ratio to;see whether recent improvements had any effect and, if so, when the effect was;noticeable;Has labour productivity changed? Use the;labour productivity ratio to support your answer.;42.;David Upton is;President of Upton Manufacturing, a producer of Go-Kart tires. Upton makes 1000 tires per day with the;following resources;Labor: 400 hours @ $12.50;per hour;Raw material: 20,000 pounds;per day @ $1 per pound;Energy: $5,000 per day;Capital: $10,000 per day;(a) What is the labor productivity for these tires at Upton;Manufacturing?;(b) What is the multifactor productivity for these tires at Upton;Manufacturing?;(c) What is the percent;change in multi-factor productivity if Upton;can reduce the energy bill by $1,000 without cutting production or changing any;other inputs?;43. Lake;Charles Seafood makes 500 wooden packing boxes for fresh seafood per day;working in two 10-hour shifts. Due to higher demand, plant managers have;decided to operate three eight-hour shifts instead. The plant is now able to;produce 650 boxes per day. Calculate the company?s productivity before the;change in work rules, and after the change. What is the percentage increase in;productivity?;A. Charles;Lackey operates a bakery in Idaho;Falls, Idaho. Because;of its excellent product and excellent location, demand has increased by 25% in;the last year. On far too many occasions, customers have not been;able to purchase the bread of their choice. Because of the size of;the store, no new ovens can be added. As a staff meeting, one;employee suggested ways to load the ovens differently so that more loaves of;bread can be baked at one time. This new process will require that;the ovens be loaded by hand, requiring additional manpower. This is;the only thing to be changed. If the bakery makes 1,500 loaves per month with a;labor productivity of 2.344 loaves per labor-hour and each worker works 160;hours per month, how many workers will Lackey need to add?;B. After;reading the information above, note that the pay will be $8 per hour for;employees. Charles Lackey can also improve the yield by purchasing a;new blender. The new blender will mean an increase in his;investment. This added investment has a cost of $100 per month, but;he will achieve the same output (an increase to 1,875) as the change in labor;hours. Which is the better decision?;? Show;the productivity change, in loaves per dollar, with an increase in labor cost;(from 640 to 800 hours).;? Show the;new productivity, in loaves per dollar, with only an increase in investment;($100 per month more).;? Show;the percent productivity change for labour and investment.;C. If;Charles Lackey?s utility costs remain constant at $500 per month, labour at $8;per hour, and cost of ingredient at $0.35 per loaf, but Charles does not;purchase the blender suggested above, what will the productivity of the bakery;be? What will be the percent increase or decrease?;CHEMICALS CORP.;Bob Richards, the production manager of Zychol Chemicals, in Houston, Texas;is preparing his quarterly report which is to include a productivity analysis;for his department. One of the inputs is production data prepared by Sharon;Walford, his operations analyst. The report, which she gave him this morning;showed the following;2000;2001;Production (units);4,500;6,000;Raw Material Used (barrels of petroleum by-products);700;900;Labor Hours;22,000;28,000;Capital Cost Applied To The Department (?);375,000;620,000;Bob knew that his labor cost per hour had increased from an average of;$13.00 per hour to an average of $14.00 per hour, primarily due to a move by;management to become more competitive with a new company that had just opened a;plant in the area. He also knew that his average cost per barrel of raw;material had increased from $320 and $360. He had concern about the accounting;procedures that increased his capital cost from $375,000 and $620,000, but;earlier discussions with his boss suggested that there was nothing that could;be done about that allocation.;Bob wondered if his productivity had increased at all. He called Sharon into the office;and conveyed the above information to her and asked her to proceed with;preparing this part of the report.;DISCUSSION QUESTIONS;1.;Prepare the productivity part of the report for Mr.;Richards. He probably expects some analysis of productivity inputs for all;factors, as well as a multifactor analysis for both years with the change in;productivity (up or down) and the amount noted.;2.;The producer price index had increased from 120 to 125;and this fact seemed to indicate to Mr. Richards that his costs are too high.;What do you tell him are the implications of this change in the producer price;index?;3.;Management?s expectation for departments such as Mr.;Richards? is an annual productivity increase of 5%. Did he reach this goal?
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