Sintok Machines (SM) produces cast bronze valves for use in offshore oil platforms. Currently, SM produces 1600 valves per day. The 20 workers at SM work from 7 a.m. until 4 p.m., with 30 minutes off for lunch and a 15-minute break during the morning work session and another at the afternoon work session. SM is in a competitive industry and needs to increase productivity to stay competitive. They feel that a 20 % increase is needed. SM's management believes that the 20 % increase will not be possible without a change in working conditions, so they change work hours. The new schedule calls on workers to work from 8:00 a.m. until 5:00 p.m., during which workers can take one hour off at any time of their choosing. Obviously, the number of paid hours is the same as before, but production increases, perhaps because
Sintok Machines (SM) produces cast bronze valves for use in offshore oil platforms. Currently, SM produces 1600 valves per day. The 20 workers at SM work from 7 a.m. until 4 p.m., with 30 minutes off for lunch and a 15-minute break during the morning work session and another at the afternoon work session. SM is in a competitive industry and needs to increase productivity to stay competitive. They feel that a 20 % increase is needed. SM's management believes that the 20 % increase will not be possible without a change in working conditions, so they change work hours.
The new
a. Calculate labor productivity for the initial situation
b. For the hypothetical 20 percent increase in productivity, what is the daily output?
c. What is the new productivity after changing the work rules?
d. Analyze and write a short comment based on (c).
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