Question 1:
Eric Johnson makes billiard balls in his New England plant. With recent increases in his costs, he has a newfound interest in efficiency. Eric 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. 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, including the improvement for labor-hours, the typical standard for comparison.
Eric Johnson (using data from Problem 1 (a)) determines his costs to be as follows:
Labor: $10 per hour
Resin: $5 per pound
Capital Expense: 1% per month of investment
$0.50 per BTU
Show the percent change in productivity for one month last year versus one month this year, on a total multifactor basis with dollars as the common denominator.
Question 2:
¨Douglas Kosb operates a bakery in Jogfalls, India. 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. At 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 currently makes 1,500 loaves per month with a labor productivity of 2.344 loaves per labor-hour, how many workers will Douglas need to add in able to meet the 25% increase in demand? (Hint: Each worker works 10 hours per month.)
Question 3:
Natalie runs a small job shop where garments are made. The job shop employs eight workers. Each worker is paid $10 per hour. During the first week of March, each worker worked 45 hours. Together, they produced a batch of 132 garments. Of these garments, 52 were "seconds" (meaning that they were flawed). The seconds were sold for $90 each at a factory outlet store. The remaining 80 garments were sold to retail outlets at a price of $198 per garment. What was the labor productivity, in dollars per labor-hour, at this job shop during the first week of March?