A company manufactures particle boards in a production facility. With recent increases in input costs, the company has implemented new machines that lower raw material waste and reduce en- ergy consumption. The new machines also have improved automation and therefore lower the labour requirements for the same level of production. The company believes that if a 3% improve- ment productivity (with respect to each input) is achieved it will offset the increased raw material costs. The company calculated the following information | LAST YEAR CURRENT YEAR 10,000 Boards produced Labour (hours) Wood chips (kg) Resin (kg) Energy (kWh) Labour cost (S/hour) Wood chips cost (S/kg) Resin (S/kg) Energy (S/kWh) 10,000 15,250 10,150 16,000 10,750 500 470 30,000 28,500 20.00 21.50 15.15 15.35 3.55 3.50 0.09 0.10

A company manufactures particle boards in a production facility. With recent increases in input costs, the company has implemented new machines that lower raw material waste and reduce en- ergy consumption. The new machines also have improved automation and therefore lower the labour requirements for the same level of production. The company believes that if a 3% improve- ment productivity (with respect to each input) is achieved it will offset the increased raw material costs. The company calculated the following information | LAST YEAR CURRENT YEAR 10,000 Boards produced Labour (hours) Wood chips (kg) Resin (kg) Energy (kWh) Labour cost (S/hour) Wood chips cost (S/kg) Resin (S/kg) Energy (S/kWh) 10,000 15,250 10,150 16,000 10,750 500 470 30,000 28,500 20.00 21.50 15.15 15.35 3.55 3.50 0.09 0.10

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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