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Assignment 1

This document contains an assignment problem from the Industrial Engineering Department at Wollo University's Kombolcha Institute of Technology. It provides data for 6 problems related to calculating various productivity metrics for a company called PCCorp over a 1-year period. It details PCCorp's revenues, inventory levels, expenses and costs to allow calculations of labor productivity, multi-factor productivity, total productivity and capital productivity. It also describes a quality issue that reduced revenues and discusses how this lowers total productivity.

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marye asfaw
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198 views1 page

Assignment 1

This document contains an assignment problem from the Industrial Engineering Department at Wollo University's Kombolcha Institute of Technology. It provides data for 6 problems related to calculating various productivity metrics for a company called PCCorp over a 1-year period. It details PCCorp's revenues, inventory levels, expenses and costs to allow calculations of labor productivity, multi-factor productivity, total productivity and capital productivity. It also describes a quality issue that reduced revenues and discusses how this lowers total productivity.

Uploaded by

marye asfaw
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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WOLLO UNIVERSITY

KOMBOLCHA INSTITUTE OF TECHNOLOGY


Industrial Engineering Department
Production and Project Management
Assignment 2
Problem

Data for Problems 1–6:

In a 1-year period, the Productive Components Corporation (known as PCCorp) has shipped
units worth $1,200,000 to its customers. It produced units worth $250,000 for finished goods
(FG) inventory. PCCorp has $50,000 of work-in-process (WIP) units. During the same 1-year
period of time, PCCorp had a labor bill of $140,000. Its capital expenses for the year are
calculated to be $430,000. Materials were purchased costing $530,000. Energy expenses were
$225,000, and miscellaneous expenses were estimated to be $75,000.

1. Calculate the labor productivity for PCCorp with respect to units shipped. In place of
fixed cost, use sales; set variable cost (VC) to zero; in place of selling price (SP), use
labor cost. Breakeven volume in solution is equivalent to labor productivity.
2. Calculate the MFP composed of labor and capital for units shipped plus finished goods
for PCCorp. In place of fixed cost, use sales + finished goods; set variable cost to zero; in
place of selling price, use labor cost + capital expenses. Breakeven volume in solution is
equal to MFP.
3. What is PCCorp’s total productivity? Abbreviating, in place of FC use sales + FG +
WIP; VC = 0; in place of SP, use total of all costs. BEV in solution is equal to total
productivity.
4. What is PCCorp’s capital productivity? For FC, use sales + FG + WIP; VC = 0; SP =
capital expenses. BEV is capital productivity.
5. The value of the units shipped must be reduced because $350,000 worth of them have
been returned as defective. Of the finished goods units (FG), $150,000 worth been
returned as defective. All WIP units are within tolerances. Rework on the defective units
reduces their value by 70%. What is the cost of the quality problem that has surfaced?
Discuss what this means in terms of total productivity. Show that total productivity has
dropped significantly (see Problem 3).
6. Calculate the MFP composed of capital, materials, and energy consumed for the total
reworked output, which consists of units shipped plus FG plus WIP.

Time Allowed: One week

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