Q) Maria Enterprise makes a variety of consumer electronic products. Its camera manufacturing plant is considering choosing between two different processes, named A and B, which can be used to make two parts: Part 1 and Part 2. To make the correct decision, the managers would like to compare the labour and total productivity of process A with that of process B. Find labour and total productivity of both processes and find which process is better than the other. The data is given in the table   No. of Product Labour cost per part Material cost per part   Part 1 Part 2 Part 1 Part 2 Part 1 Part 2 Process A 50 60 25 30 60 70 Process B 30 80 30 40 50 55 Output value for each part and overhead cost for each process are given in the below     Part 1 Part 2     Process A Process B Output Value per part   200   150 Overhead cost per process   6000   5000 Q) In above question, we want to make both processes to have exactly the same total productivity (the higher productivity of two options). It is found that only way to do so is to decrease the labour cost per part for Part 2. What is the amount of decrease to make the total productivity of both processes exactly the same?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Q) Maria Enterprise makes a variety of consumer electronic products. Its camera manufacturing plant is considering choosing between two different processes, named A and B, which can be used to make two parts: Part 1 and Part 2. To make the correct decision, the managers would like to compare the labour and total productivity of process A with that of process B. Find labour and total productivity of both processes and find which process is better than the other. The data is given in the table

 

No. of Product

Labour cost per part

Material cost per part

 

Part 1

Part 2

Part 1

Part 2

Part 1

Part 2

Process A

50

60

25

30

60

70

Process B

30

80

30

40

50

55

Output value for each part and overhead cost for each process are given in the below

 

 

Part 1

Part 2

 

 

Process A

Process B

Output Value

per part

 

200

 

150

Overhead cost

per process

 

6000

 

5000

Q) In above question, we want to make both processes to have exactly the same total productivity (the higher productivity of two options). It is found that only way to do so is to decrease the labour cost per part for Part 2. What is the amount of decrease to make the total productivity of both processes exactly the same?

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