Concept explainers
A
Interpretation: the total percentage by which the costs should be reduced in order to increase the Multifactor Productivity by 10%, when only material cost is reduced is to be identified.
Concept Introduction: The multifactor productivity ratio contains the productivity of a collection of inputs involved in the production progression. This helps to identify how resourcefully an organization exploits its operational resources.
B
Interpretation: the total percentage by which the costs should be reduced in order to increase the Multifactor Productivity by 10%, when only labor cost is reduced is to be identified.
Concept Introduction: The multifactor productivity ratio comprises of the productivity of a group of inputs involved in production. This aids in identifying how resourcefully an organization exploits its operational resources.
C
Interpretation: the total percentage by which the costs should be reduced in order to increase the Multifactor Productivity by 10%, when only overhead cost is reduced is to be identified.
Concept Introduction:The multifactor productivity ratio includes the productivity of a collection of inputs elaborated in production. This benefits in identifying how resourcefully an organization exploits its operational resources.
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Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (11th Edition)
- Your company is preparing an estimate of its production costs for the coming period. The controller estimates that direct materials costs are$45 per unit and that direct labor costs are$21 per hour. Estimating overhead, which is applied on the basis of direct labor costs, is difficult. The controller's office estimated overhead costs at $3,600 for fixed costs and $18 per unit for variable costs. Your colleague, Lance, who graduated from a rival school, has already done the analysis and reports the "correct" cost equation as follows: Overhead cost = $10,600 + $16.05 per unit Lance also reports that the correlation coefficient for the regression is .82 and says, "With 82 percent of the variation in overhead explained by the equation, it certainly should be adopted as the best basistot estimating costs." When asked for the data used to generate the regression, Lance produces the following: Month Overhead Unit Production $57,144 60,756 77,040 3,048 3,248 4,176 3 4. 56,412 81,396 72,252…arrow_forwardWhy is the primary use of a business model tied to business-level strategies? Less adjustment will be needed in the long-term. All processes followed to create the product should be similar. It is the framework for delivering value. The firm's core strategy has to be supported.arrow_forward26) A competitive advantage can be realized if an organization can achieve effective integration of its various business processes. True or False? True Falsearrow_forward
- Development and Production Plan Maintaining your output level in order to meet your customers' demands is a necessary skill. As a result, the following questions must be addressed:• What quantity and how frequently should my goods be produced? (This would depend on sales turnover)• What raw material is used in production?• Is the raw material available?• Do I need anyone to assist in the production (you may want to be a bit more specific here)?• If special skills are needed, how can they be acquired and retained?• What are the total production costs?In order to estimate the cost of production you would need to do the following:• Identify all the inputs needed to produce and sell.• Calculate the cost of the production of a specific quantity that you can manage.• Identify production inputs under the following headings:Fixed cost: Costs that will be incurred regardless of the level of production.Variable Costs: Costs that are directly related to the level of production. The more goods…arrow_forwardBathrobes Inc. employees work 10 hours a day, with a 30 min break, 5 days a week. This company is manufacturing terrycloth bathrobes. The standard minute value to finish a robe = 40 minutes. The company’s 17 employees produce 210 robes a day. What is their bathrobes production efficiency? Round your answer to the nearest whole number, but do not round until your final answer. Group of answer choices 89% 86% 88% 87%arrow_forwardPlease answer it with clean and complete solution. Thank you.arrow_forward
- Sweet Tooth Inc., a leading chocolatier, can produce 100 pounds of chocolate powder from 1000 pounds of cocoa beans in 10 hours of processing. Not satisfied with its output, the company is contemplating switching to a more automated process that would yield 200 pounds of chocolate powder from 1800 pounds of cocoa beans and take 15 hours to process. The cost of processing the $25 per hour. Cocoa beans cost $6.80 per pound. Calculate the following and show step by step breakdown. The labor productivity of the current process The labor productivity of the proposed process The multifactor productivity of the current process The multifactor productivity of the proposed process Should Sweet Tooth Inc. continue with the existing process or switch to the new process?arrow_forwardCould you show me the equation and breakdown of this, that I could understand? Particulars Amount Units Produced 5,000 Total production cost 290,000 Fixed cost 30,000 Total variable cost 260,000 Variable cost per unit $52arrow_forwardIII. Productivity and Quality. Read and analyze each problem. For better presentation, draw diagrams illustrating the problem. 1. One of the items that the Philippines export is electrical transformers used in electric trains. Assume that the basic model costs USD 3000 (PhP 180,000) to produce. A plant located in Batangas typically produces 500 units weekly of this type, but only x = 85% managed to pass the inspection. About three-fifths of the defective items can still be reworked to meet the standards at an additional cost of USD 500 (PhP 30,000). Compute the quality productivity ratio and product cost per pair. Assuming the same costs and percentage of rework apply, compare the above scenario with a scenario with about x = 95% passing the inspection. For reasonable values of x (85% to 100%), graph the QPR as a function of x. For reasonable values of x (85% to 100%), graph the product cost per unit as a function of x. What can you conclude? a. b. C. d. e.arrow_forward
- III. Productivity and Quality. Read and analyze each problem. For better presentation, draw diagrams illustrating the problem. 1. One of the items that the Philippines export is electrical transformers used in electric trains. Assume that the basic model costs USD 3000 (PhP 180,000) to produce. A plant located in Batangas typically produces 500 units weekly of this type, but only x = 85% managed to pass the inspection. About three-fifths of the defective items can still be reworked to meet the standards at an additional cost of USD 500 (PhP 30,000). -For reasonable values of x (85% to 100% ) , graph the QPR as a function of x. For reasonable values of x (85% to 100% ) , graph the product cost per unit as a function of x. What can you conclude?arrow_forwardWhich of the following sort of activties from a value chain analysis might be elements that could increase customer willingness to pay? O A. Activities to enhance customer retention B. Manufacturing facility efficiency OC. Extensive employee training O D. A&B O E. B&C O F. A&Carrow_forwardhow is the demand met? who are processing the products to meet the need ? how much of the need is now being met?arrow_forward
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