ABC company creates specialty shipping bags that they sell to pharmaceutical companies across the globe. With their current equipment, ABC can produce 12,000 shipping bags for every 10 bundles of materials purchased. Every month (20 working days), ABC purchases100 bundles of materials. Each bundle requires one (1) labor minute to process, and every labor hour costs an average of $14.00. Each week (5 working days), ABC pays $5,000 inoverhead costs, and equipment costs $600 a day to operate.(a) How many shipping bags does ABC produce in a standard month (20 working days)? Each workday (8 hours)? (b). What is the single-factor productivity for labor, per workday (8 hours)? (d). What is the multi-factor productivity, for every dollar spent per shipping bag?
ABC company creates specialty shipping bags that they sell to pharmaceutical companies across the globe. With their current equipment, ABC can produce 12,000 shipping bags for every 10 bundles of materials purchased. Every month (20 working days), ABC purchases100 bundles of materials. Each bundle requires one (1) labor minute to process, and every labor hour costs an average of $14.00. Each week (5 working days), ABC pays $5,000 inoverhead costs, and equipment costs $600 a day to operate.(a) How many shipping bags does ABC produce in a standard month (20 working days)? Each workday (8 hours)? (b). What is the single-factor productivity for labor, per workday (8 hours)? (d). What is the multi-factor productivity, for every dollar spent per shipping bag?
Productivity is an important part of an organization's core activities. It is that concept that helps in organizational development to function properly and achieve competitive advantage. It is the ratio between inputs and outputs. For the same quantity and quality of inputs, the output should also be made sufficiently with better quality products. The concept of productivity tells us how good or bad an organization is performing. It also highlights how much the resources have been exhausted but the company and whether all of it was worth it or not.
The following information is given to us:
ABC capacity - 12000 bags made for every 10 bundles
ABC availability - 100 bundles
Labor Cost - $14 per hour ( 8 hours )
Weekly overheard cost - $5000
Weekly equipment operating cost - $600 x 5 - $3000. (5 - day working)
Working days in a month is 20 days
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