Concept explainers
To determine: The productivity of Person GK and to know whether the organization is maintaining a manufacturing average of 3% increase in productivity every year.
Introduction: Productivity is a measure of the effectiveness of an individual, systems, machinery and other equipment that are used in converting inputs into outputs. In all organizations, productivity is an important determinant to know the cost efficiency.
Answer to Problem 5P
Person GK is maintaining the manufacturing average of a 3% increase in productivity per year in all the resources except capital.
Explanation of Solution
Given information: Person GK is producing bowling balls. The amount of resources used last year and in the current year is given as follows:
| Last year | Now | |
| Units produced | 1,000 | 1,000 |
| Labor (hours) | 300 | 275 |
| Resin (pounds) | 50 | 45 |
| Capital invested ($) | 10,000 | 11,000 |
| Energy (BTU) | 3,000 | 2,850 |
Formula to calculate productivity for last year and the current year:
The productivity is calculated by dividing the total number of units produced by the total input used to produce the overall output.
Formula to calculate the change in the production units:
The change in production units are calculated by subtracting the current year’s productivity from the previous year’s productivity value.
Formula to calculate the percentage of productivity change:
The percentage change in productivity is calculated by dividing the change in productivity units by the initial productivity.
Substitution:
| Resource | Last-year productivity | Current year productivity | Change in production units | Percentage of productivity change |
| Labor | 3.33 | 3.64 | 0.30 | 9.01% |
| Resin | 20.00 | 22.22 | 2.22 | 11.1% |
| Capital | 0.10 | 0.09 | -0.01 | -10% |
| Energy | 0.33 | 0.35 | 0.02 | 6.06% |
Working note:
Calculate last-year productivity for labor:
The productivity is calculated by dividing the total number of units produced by the total input used to produce the overall output.
Calculate last-year productivity for resin:
The productivity is calculated by dividing the total number of units produced by the total input used to produce the overall output.
Note: The calculation continues for capital and energy.
Calculate current year productivity for labor:
The productivity is calculated by dividing the total number of units produced by the total input used to produce the overall output.
Calculate current year productivity for resin:
The productivity is calculated by dividing the total number of units produced by the total input used to produce the overall output.
Note: The calculation continues for capital and energy.
Calculate the change in the production units for labor:
The change in production units are calculated by subtracting the current year’s productivity from the previous year’s productivity value.
Calculate the change in the production units for resin:
The change in production units are calculated by subtracting the current year’s productivity from the previous year’s productivity value.
Note: The calculation continues for capital and energy.
Calculate the percentage of productivity change for labor:
The percentage change in productivity is calculated by dividing the change in productivity units by the initial productivity.
Calculate the percentage of productivity change for resin:
The percentage change in productivity is calculated by dividing the change in productivity units by the initial productivity.
Note: The calculation continues for capital and energy.
Hence, Person GKis maintaining the manufacturing average of a 3% increase in productivity per year in all the resources except capital.
Want to see more full solutions like this?
Chapter 1 Solutions
Pearson eText Principles of Operations Management: Sustainability and Supply Chain Management -- Instant Access (Pearson+)
- George Kyparisis makes bearing balls in his Miami plant. With recent increases in his costs, he has a newfound interest in efficiency. George interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of a 3% increase in productivity per year. He has the following data representing a month from last year and an equivalent month this year: LAST YEAR NOW Production 1,000 1,000 Labor (hours) 300 250 Resin (pounds) 50 45 Capital invested ($) |10,000 11,000 Energy (BTU) 3,000 2,750 Show the productivity percentage change for each category and the multifactor productivity if possible, and then determine the improvement for labor-hours, the typical standard for comparison.arrow_forwardA company manufactures particle boards in a production facility. With recent increases in input costs, the company has implemented new machines that lower raw material waste and reduce en- ergy consumption. The new machines also have improved automation and therefore lower the labour requirements for the same level of production. The company believes that if a 3% improve- ment productivity (with respect to each input) is achieved it will offset the increased raw material costs. The company calculated the following information |LAST YEAR CURRENT YEAR 10,000 15,250 10,150 Boards produced Labour (hours) Wood chips (kg) Resin (kg) Energy (kWh) Labour cost (S/hour) Wood chips cost (S/kg) Resin (S/kg) Energy (S/kWh) 10,000 16,000 10,750 500 470 30,000 28,500 20.00 21.50 15.15 15.35 3.50 3.55 0.09 0.10arrow_forwardGeorge Kyparisis makes bowling balls in his Miamiplant. With recent increases in his costs, he has a newfound interestin efficiency. George is interested in determining the productivityof his organization. He would like to know if his organization is maintaining the manufacturing average of 3% increase in produc-tivity per year? He has the following data representing a month from last year and an equivalent month this year:arrow_forward
- Briefly describe the following term: Balanced Scorecard. How does it relate to a company's operations?arrow_forwardDevelop a balanced scorecard that the dean of the college could use to evaluate the college’s operations. Be specific and indicate the purpose of each balanced scorecard measure.arrow_forwardIf the sales forecast estimates that 50,000 units of product will be sold during the following year, should the factory plan on manufacturing 50,000 units in the coming year? Explain.arrow_forward
- The manager of a crew that installs carpeting has tracked the crew’s output over the past several weeks, obtaining these figures: Compute the labor productivity for each of the weeks. On the basis of your calculations, what can you conclude about crew size and productivity?arrow_forwardA cleaning company uses $10 of chemical, $40 of labor, and $5 of misc. expenses for each house it cleans. After some quality complaints, the company has decided to decrease to increase its use of chemicals by 50%. By what percentage has multifacetor productivity fallen?arrow_forwardGeorge Kyparisis makes bowling balls in his Miami plant. With recent increases in his costs, he has a newfound interest in efficiency. George is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of a 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this year: Units Produced Labor (hours) Resin (pounds) Capital Invested ($) Energy (BTU) Last Year 1,000 300 48 10,000 3,000 Now 1,000 275 43 11,000 2,850 Cost Per Input Unit $12 per hour $5 per pound 2% per month $0.60 per BTU The percent change in productivity for one month last year versus one month this year on a multifactor basis with dollars as the common denominator =% (enter your response as a percentage rounded to two decimal places).arrow_forward
- George Kyparisis makes bowling balls in his Miami plant. With recent increases in his costs, he has a newfound interest in efficiency. George is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of a 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this year: Units Produced Labor (hours) Resin (pounds) Capital Invested ($) Energy (BTU) The percent change in productivity for one month last year versus one month this year or decimal places). Last Year 1,200 300 50 9,000 3,000 Now 1,200 275 45 10,000 2,850 Cost Per Input Unit $10 per hour $5 per pound 1% per month $0.50 per BTU multifactor basis with dollars as the common denominator = % (enter your response as a percentage rounded to twoarrow_forwardhe manager of a crew that installs carpeting has tracked the crew’s output over the past several weeks, obtaining these figures: Week Crew Size Yards Installed 1 2 95 2 3 70 3 6 100 4 7 50 5 5 70 6 4 55 Click here for the Excel Data File a. Compute the labor productivity for each of the weeks. (Round your answers to 2 decimal places.) b. Which crew size works best?arrow_forwardProblem No. 3 George Kyparisis makes bowling balls in his Miami plant. With recent increases in his costs, he has a newfound interest in efficiency. George is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of 3% increase in productivity per year? He has the following data representing a month from last year and an equivalent month: LAST YEAR NOW Units produced 3,000 3,000 Labor (hours) 900 825 Resin (pounds) 150 135 Capital Invested ($) 30,000 33,000 Energy (BTU) 9,000 8,556 Show the productivity percentage change for each category and then determine the improvement for labor-hours, the typical standard for comparison.arrow_forward
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,