Concept explainers
a)
To compute: The labor productivity under each system.
Introduction: Labor productivity is the measure of productivity of a worker during a period of time. It the ratio of total output to the total productivity hours.
a)
Answer to Problem 4P
Explanation of Solution
Given information:
Prior to buying new equipment:
After buying new equipment:
After buying new equipment, one worker is transferred to another department, equipment cost is increased by $10/hour and output increased by four carts/hour.
Formula:
Calculation of Labor productivity:
Prior to buying new equipment:
Labor productivity prior to buying new equipment is calculated by dividing number of carts of 80 with the number of workers 5 which yields 16 carts/worker/hour
After buying new equipment:
Labor productivity after buying new equipment is calculated by dividing number of carts of 84 with the number of workers 4which yields 21 carts/worker/hour.
Hence, labor productivity before buying new equipment is 16 carts/worker/hour and after buying new equipment is 21 carts/worker/hour.
b)
To compute: The multifactor productivity.
Introduction: Multifactor productivity is also referred as total factor productivity. It is the measure of economic performance by comparing the amount of goods and services produced to the total input used to produce the output.
b)
Answer to Problem 4P
Explanation of Solution
Given information:
Prior to buying new equipment:
After buying new equipment:
After buying new equipment, one worker is transferred to another department, equipment cost is increased by $10/hour and output increased by four carts/hour.
Formula:
Calculation of Multifactor productivity:
Prior to buying new equipment:
Labor cost is calculated by multiplying number of workers (5) with 10/ hours which gives 50/hour.
Multifactor productivity is calculated by dividing output of 80 carts with the total cost of $90 ($50+$40) which yields 0.89 carts/dollar.
After buying new equipment:
Labor cost is calculated by multiplying number of workers (4) with 10/ hours which gives 40/hour.
Multifactor productivity is calculated by dividing output of 84 carts with the total cost of $90 ($40+$50) which yields 0.93 carts/dollar.
Hence, multifactor productivity prior to buying new equipment is 0.89 carts/dollar and after buying new equipment is 0.93 carts/dollar.
c)
To determine: The changes in productivity and comment the best one.
Introduction: Productivity is the measure of performance of a person, machine or an organization. It is computed by dividing the average output per period by the total cost incurred or resources used in the process.
c)
Answer to Problem 4P
Explanation of Solution
Given information:
Prior to buying new equipment:
After buying new equipment:
After buying new equipment, one worker is transferred to another department, equipment cost is increased by $10/hour and output increased by four carts/hour.
Formula:
Labor productivity growth:
The labor productivity growth is calculated by dividing the difference of 21 and 16 with 16 which gives 31.25%
Multifactor productivity growth:
Multifactor productivity growth is calculated by dividing the difference of 0.93 and 0.89 with 0.89 which gives 4.49%.
Hence, labor productivity growth is 31.25% and multifactor productivity growth is 4.49%.
Want to see more full solutions like this?
Chapter 2 Solutions
Operations Management
- A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 6 workers, who together produced an average of 80 carts per hour. Workers receive $14 per hour, and machine cost was $30 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour, while output increased by 5 carts per hour.arrow_forward1. A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used five workers, who produced an average of 100 carts per hour. Workers receive $20 per hour, and machine cost was $50 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $10 per hour while output increased by four carts per hour. a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. b. Compute the multifactor productivity under each system. Use carts per dollar cost (labor plus equipment) as the measure. Comment on the changes in productivity according to the two measures, and on which one you believe is the more pertinent for this situation. C.arrow_forward2arrow_forward
- Please answer all parts clearly & make sure you round it if askedarrow_forward3 = noito This work cell will produce 617 units per day (8h x 60 m x 60 se) / 46.67 = 617 Takt time = 140/3 = 46.67 Copyright © 2017 Pearson Education, Ltd. Takt time design Creating plate printing cutting packaging Example: 100 Al-Nojoom Company for advertising has identified the following operations as necessary for the work cell for producing color posters. The customer expects delivery 1000 poster per day, and the work day 10 hours. 1. What is the takt time? Copyright © 2017 Pearson Education, Ltd. 2. How many employees are required? 3. If the number of employees assumed to be 9 employees. Find the quantity of products they able to produce. 4. If the work cell has 4 employees find the Total work time by hours needed to produce 600 units with the same operational time. operation Standard time 21.01 unitnos (min) 1.1 0.9 .75 1.25 1 9-33 sill nG a super 9-34arrow_forwardMr. K’s is a very popular hair salon. It offers high quality hairstyling andphysical relaxation services at a reasonable price, so it always has unlimiteddemand. The service process includes five activities that are conducted inthe sequence described below ( the time required for each activity is shownin parenthesis):Activity 1: Welcome a guest and offer homemade herb tea (10 minutes)Activity 2: Wash and condition har (10 minutes)Activity 3: Neck, shoulder, and back stress release massage (10 minutes)Activity 4: Design and hair style and do the hair (25 minutes)Activity 5: Ring up the guest bill (5 minutes)Each activity has one employee dedicated to it. For the following questions,assume unlimited demand. Also assume that the employee at activity 1 onlyadmits new guests at the rate of the bottleneck.(a) Which resource is the bottleneck?(b) What is the capacity of the process?(c) What is the flow rate?(d) What is the utilization of the employee at activity 3(e) What is the cycle time?arrow_forward
- 4. Manufacturing Cycle Efficiency CFA Company keeps careful track of the time related to orders and their production. During the most recent quarter, the following average times were recorded for each unit or order: Inspection time Process time Queue time Move time Wait time 2 days 4 days 6 days 8 days 10 days REQUIRED: A) How long in days is the manufacturing cycle time or throughput time? B) What is the manufacturing cycle efficiency ratio? C) What percentage of the production time is spent on non-value-added activities? D) How long in days is the delivery cycle time?arrow_forwardFour employees at a fast-food restaurant each perform one of the four activities in serving a customer: greet customer, take order, process order, and deliver order. The processing time for each activity is given as follows: Greet customer Take order Process order Deliver order A) 50% Assume demand is unlimited. What is the average labor utilization? B) 68% C) 40% Activity D) 162% Processing time per customer 2 seconds 30 seconds 60 seconds 5 secondsarrow_forwardGive typed full explanationarrow_forward
- An accounting firm is capable of processing 24 EZ tax forms per day, and the average number of forms on-hand in the office is 60 forms. What is the average processing time per EZ tax form? Assume Little's Law is applied. Round your answer to two decimal places.arrow_forwardAn accounting firm is capable of processing 20 EZ tax forms per day, and the average number of forms on-hand in the office is 74 forms. What is the average processing time per EZ tax form? Assume Little's Law is applied. Round your answer to two decimal places. daysarrow_forwardOutput from the Gantt chart drawn for a machining process is shown here. Determine the makespan of the process. Job Waiting Time (hr) Delivery Time (hr) 1 0 10 2 10 15 3 1 16arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,