Answered: The MacJunkin Company manufactures…

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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The MacJunkin Company manufactures transmission parts. The current process uses 20 workers and produces 400 units per hour. You are considering changing the process with new manufacturing methods that increase output to 470 units per hour but will require 22 workers. Workers are paid at a rate of $15 per hour, and overhead is charged at 140% (or 1.4 times) labor costs. Finished switches sell for $80/unit. The details are as follows:

	Current Process	New Process
Output (Units/Hour)	400	470
Number of Workers	20	22
Material (Cost/Hour)	$120	$150

These are the correct answers can you show me how to get these answers?

A. What is the multifactor productivity ratio for the current process?

38.10

B. What is the multifactor productivity ratio for the new process?

39.92

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