The Operations Manager provides the following information for its 2 business entities: Company A Company B Units Produced 1,250 1,400 Sales Price/Unit $30 $30 Labour Hours 2,450 3,000 Labour Cost/Hour $5.0 $4.5 Materials $3,875 $4,285 Energy Consumption Capital Consumption (20%) $1,300 $1,550 $50,000 $70,000 Others $1,350 $1,600 (a) Using the above information, calculate the total factor productivit index for Company A & B. (b)Assume the benchmark for total productivity index for Company A 1.25 while for Company B it is 1.35. Comment on the productivity index for Company A & B and suggest ways for improvement (if any).
The Operations Manager provides the following information for its 2 business entities: Company A Company B Units Produced 1,250 1,400 Sales Price/Unit $30 $30 Labour Hours 2,450 3,000 Labour Cost/Hour $5.0 $4.5 Materials $3,875 $4,285 Energy Consumption Capital Consumption (20%) $1,300 $1,550 $50,000 $70,000 Others $1,350 $1,600 (a) Using the above information, calculate the total factor productivit index for Company A & B. (b)Assume the benchmark for total productivity index for Company A 1.25 while for Company B it is 1.35. Comment on the productivity index for Company A & B and suggest ways for improvement (if any).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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