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Homework I

The document outlines various productivity problems and solutions related to manufacturing and resource management. It includes calculations for productivity in terms of labor, resin, capital, and energy, as well as multifactor productivity and cost analysis for different scenarios. Key examples involve Lori Cook's care packages, George Kyparisis's bowling balls, Hokey Min's rug cleaning, and Lillian Fok's bicycle tire production.

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Eldeniz Aliyev
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58 views6 pages

Homework I

The document outlines various productivity problems and solutions related to manufacturing and resource management. It includes calculations for productivity in terms of labor, resin, capital, and energy, as well as multifactor productivity and cost analysis for different scenarios. Key examples involve Lori Cook's care packages, George Kyparisis's bowling balls, Hokey Min's rug cleaning, and Lillian Fok's bicycle tire production.

Uploaded by

Eldeniz Aliyev
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 6

Aliyev Eldeniz Zu01.

22
Problems 1.4 to 1.8 relate to The Productivity
Challenge
• 1.4 Lori Cook produces “Final Exam Care Packages” for resale by her
sorority. She is currently working a total of 5 hours per day to produce
100 care packages.

a) What is Lori’s productivity?

b) Lori thinks that by redesigning the package, she can increase her
total productivity to 133 care packages per day. What will be her new
productivity?

c) What will be the percentage increase in productivity if Lori makes the


change?

Answers:

a) Initial Productivity
Output
Productivity =
Input
100 care packages
¿ =20 packages per hour
5 hours

b) New Productivity
133 care packages
¿ =26.6 packages per hour
5 hours

c) Percentage Increase

Percentage Increase= (New Productivity −Old Productivity


Old Productivity ) ×100
¿ ( 26.6−20
20 )
×100=33 %

• 1.5 George Kyparisis makes bowling balls in his Miami plant. With
recent increases in his costs, he has a newfound interest in efficiency.
George is interested in determining the productivity of his organization.
He would like to know if his organization is maintaining the
manufacturing average of 3% increase in productivity per year? He has
the following data representing a month from last year and an equivalent
month this year: LAST YEAR NOW Units produced 1,000 1,000 Labor
(hours) 300 275 Resin (pounds) 50 45 Capital invested ($) 10,000 11,000
Energy (BTU) 3,000 2,850 Show the productivity percentage change for
each category and then determine the improvement for labor-hours, the
typical standard for comparison.

Answers:

Productivity for Each Category


Output
Productivity =
Input

Labor Productivity:
1000
Last Year = =3.33
300
1000
Now = =3.64
275

Percentage Change= ( 3.64−3.33


3.33 )× 100=9.31 %
Resin Productivity:
1000
Last Year = =20
50
1000
Now = =22.22
45

Percentage Change= ( 22.22−20


20 ) ×100=11.11%
Capital Productivity:
1000
Last Year = =0.1
10,000
1000
Now = =0.0909
11,000
Percentage Change= ( 0.0909−0.1
0.1 ) ×100=−9.09 %
Energy Productivity:
1000
Last Year= =0.333
3000
1000
Now = =0.3509
2850

Percentage Change= ( 0.3509−0.333


0.333 ) ×100=5.43 %
Labor-Hours Comparison to Standard (3%)

• 1.6 George Kyparisis (using data from Problem 1.5) determines his
Since 9.31% > 3% , Yes, he is exceeding the standard.

costs to be as follows:

◆ Labor: $10 per hour

◆ Resin: $5 per pound

◆ Capital expense: 1% per month of investment

◆ Energy: $0.50 per BTU

Show the percent change in productivity for one month last year versus
one month this year, on a multifactor basis with dollars as the common
denominator.

Answers:

Cost Calculation:

 Labor Cost: 300×10=3000, 275×10=2750

 Resin Cost: 50×5=250, 45×5=225

 Capital Cost: 1%of 10,000 = 100, 1% of 11,000 = 110

 Energy Cost: 3,000 ×0.50=1500 , 2,850× 0.50=1425

Total Costs:

 Last Year: 3000+250+100+ 1500=4850

 Now: 2750+225+ 110+1425=4510


Multifactor Productivity:
1000
Last Year = =0.2062
4850
1000
Now = =0.2217
4510

Percentage Change= ( 0.2217−0.2062


0.2062 ) ×100=7.53 %

•1.7 Hokey Min’s Kleen Karpet cleaned 65 rugs in October, consuming


the following resources:

Labor: 520 hours at $13 per hour

Solvent: 100 gallons at $5 per gallon

Machine rental: 20 days at $50 per day

a) What is the labor productivity per dollar?

b) What is the multifactor productivity?

Answers:

a) Labor Productivity Per Dollar


65
¿
( 520× 13 )
65
¿ =0.00962 rugs per dollar
6760

b) Multifactor Productivity

Total Costs:

 Labor: 520 ×13=6760

 Solvent: 100 ×5=500

 Machine Rental: 20 ×50=1000


Total Cost =6760+500+1000=8260
65
Multifactor Productivity= =0.00787 rugs per dollar

• 1.8 Lillian Fok is president of Lakefront Manufacturing, a producer of


8260

bicycle tires. Fok makes 1,000 tires per day with the following resources:

Labor: 400 hours per day @ $12.50 per hour

Raw material: 20,000 pounds per day @ $1 per pound

Energy: $5,000 per day

Capital costs: $10,000 per day

a)What is the labor productivity per labor-hour for these tires at


Lakefront Manufacturing?

b) What is the multifactor productivity for these tires at Lakefront


Manufacturing?

c)What is the percent change in multifactor productivity if Fok can


reduce the energy bill by $1,000 per day without cutting production or
changing any other inputs?

Answers:

a) Labor Productivity Per Hour


1000
Labor Productivity = =2.5 tires per hour
400

b) Multifactor Productivity

Total Costs:

 Labor Cost: 400 × 12.5=5000

 Raw Material: 20,000 ×1=20,000

 Energy Cost: 5000

 Capital Cost: 10,000


Total Cost =5000+20000+5000+10000=40000
1000
Multifactor Productivity= =0.025 tires per dollar
40000
c) Percent Change in Multifactor Productivity (Reducing Energy by
$1000$)

New Total Cost:


¿ 40000−1000=39000
1000
New Multifactor Productivity = =0.02564
39000

Percentage Change= ( 0.02564−0.025


0.025 )× 100=2.56 %

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