Answered: An air-conditioner factory makes three…

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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An air-conditioner factory makes three different types of air-conditioners: the ceiling type, the cassette type and the wallmounted type. Weekly sales of each type are 2, 4 and 6 pieces, at a price of €350, €450, and €500 each, respectively. The ceiling type can be assembled in 1.5 hours, the cassette type in 1 hour and the wall-mounted type in 45 minutes. Labour cost is €40 per hour and the current factory’s multi factor productivity is 2.2.
a) Calculate the average cost per air-conditioner based on current
multifactor productivity
b) Calculate labor productivity (in euro per hour) for each type
of air-condition
c) Where the company should focus its efforts, based (i) on the
labor productivity, and (ii) on average cost?

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