Operations Management
Operations Management
13th Edition
ISBN: 9781259667473
Author: William J Stevenson
Publisher: McGraw-Hill Education
bartleby

Concept explainers

Question
Book Icon
Chapter 2, Problem 7P

a)

Summary Introduction

To compute: The labor productivity and multifactor productivity for each unit.

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)

Expert Solution
Check Mark

Answer to Problem 7P

Multifactor productivity has dropped from 0.020 to 0.015.

Explanation of Solution

Given information:

Unit Employees Customer processed/day
A 4 36
B 5 40
C 8 60
D 3 20

Hourlywage=$25Overhead=1.0×LaborcostMaterialcost=$5percustomer

Formula:

MultifactorProductivity=OutputTotalcostLaborProductivity=CustomersperdayEmployeesTotalcost=Laborcost+Overheadcost+Materialcost

Laborcost=Numberofworkers×8hours×$25/hourOverheadcost=Laborcost×1.00Materialcost=Customers×$5/customer

Calculation of multifactor productivity:

Unit Employees Customer processed/day Labor cost Overhead cost Material cost Total cost Labor productivity MFP (2decimal) MFP (3decimal)
A 4 36 800 800 180 1780 9 0.02 0.020
B 5 40 1000 1000 200 2200 8 0.02 0.018
C 8 60 1600 1600 300 3500 7.5 0.02 0.017
D 3 20 600 600 100 1300 6.6666667 0.02 0.015

Table 1

Excel Worksheet:

Operations Management, Chapter 2, Problem 7P , additional homework tip  1

Calculation of multifactor productivity:

Unit A:

Labor cost is calculated by multiplying number of workers (4) with 8working hours and 25 hourly wages which gives 800.

Overhead cost is calculated by multiplying Labor cost of 800 with 1.0 which gives 800.

Material cost is calculated by multiplying 36 with 5 which gives 180.

Total cost is calculated by adding labor cost of 800, overhead cost of 800 and material cost of 180 which yields 1780.

Labor productivity is calculated by dividing 36 with 4 which yields 9.

Multifactor productivity is calculated by dividing 36 with the total cost of 1,780 which yields 0.02 (2-decimal) and 0.020 (3 decimal).

Same procedure is followed for unit B, C and D the result is shown in table 1.

Hence, multifactor productivity has dropped from 0.020 to 0.015.

b)

Summary Introduction

To compute: The labor productivity and multifactor productivity for each unit.

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)

Expert Solution
Check Mark

Answer to Problem 7P

Multifactor productivity has dropped from 0.022to 0.017.

Explanation of Solution

Given information:

Every employee process on additional customers.

Unit Employees Customer processed/day
A 4 40
B 5 45
C 8 68
D 3 23

Hourlywage=$25Overhead=1.0×LaborcostMaterialcost=$5percustomer

Formula:

MultifactorProductivity=OutputTotalcostLaborProductivity=CustomersperdayEmployeesTotalcost=Laborcost+Overheadcost+Materialcost

Laborcost=Numberofworkers×8hours×$25/hourOverheadcost=Laborcost×1.00Materialcost=Customers×$5/customer

Calculation of multifactor productivity:

Unit Employees Customer processed/day Labor cost Overhead cost Material cost Total cost Labor productivity MFP (2decimal) MFP (3decimal)
A 4 40 800 800 200 1800 10 0.02 0.022
B 5 45 1000 1000 225 2225 9 0.02 0.020
C 8 68 1600 1600 340 3540 8.5 0.02 0.019
D 3 23 600 600 115 1315 7.6666667 0.02 0.017

Table 2

Excel Worksheet:

Operations Management, Chapter 2, Problem 7P , additional homework tip  2

Calculation of multifactor productivity:

Unit A:

Labor cost is calculated by multiplying number of workers (4) with 8 working hours and 25 hourly wages which gives 800.

Overhead cost is calculated by multiplying Labor cost of 800 with 1.0 which gives 800.

Material cost is calculated by multiplying 40 with 5 which gives 200.

Total cost is calculated by adding labor cost of 800, overhead cost of 800 and material cost of 200 which yields 1800.

Labor productivity is calculated by dividing 40 with 4 which yields 10.

Multifactor productivity is calculated by dividing 40 with the total cost of 1,800 which yields 0.02 (2-decimal) and 0.022 (3 decimal).

Same procedure is followed for unit B, C and D the result is shown in table 2.

Hence, multifactor productivity has dropped from 0.022to 0.017.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Th e following information is provided to you for each offi ve elements performed in building the Aviator model, a basicuniversal remote control. (a) Calculate the normal time for each element.(b) If the company uses a 15 percent allowance factor basedon time worked, calculate the standard time for eachelement.(c) Calculate the standard hourly output.(d) Calculate the expected hourly output at 90 percent ofstandard
Shop: Milk Tea Provide a snapshot of the business workforce using quantitative and qualitative data. Remember to describe the total workforce, including non-teaching staff and volunteers. ( make your own employees and infomation not more than 10 and not less than 6 employees).  Quantitative sources Current workforce (number of employees and headcount) by role/department of functions, classification levels and employment mode. Number of funded positions  Number of funded vacancies  Workforce characteristics (gender, age, length of time in school and in education sector, classification levels; proportion of workforce in beginning, mid and established career stages; breakdown by staff type e.g.  Teaching, specialist support, allied health, other non-teaching, volunteers). Workforce employment arrangements (full time, part time, job sharing, phased retirements). Mobility trends (number of staff exits in last 12 months and reasons for the exits e.g. promotion, resignation, parental…
Please discuss the following: In dealing with productivity and cost challenges, organizations must manage the size their workforces. Classify two (2) ways of adjusting the size of workforce to the demand of the firm.
Knowledge Booster
Background pattern image
Operations Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Text book image
Operations Management
Operations Management
ISBN:9781259667473
Author:William J Stevenson
Publisher:McGraw-Hill Education
Text book image
Operations and Supply Chain Management (Mcgraw-hi...
Operations Management
ISBN:9781259666100
Author:F. Robert Jacobs, Richard B Chase
Publisher:McGraw-Hill Education
Text book image
Business in Action
Operations Management
ISBN:9780135198100
Author:BOVEE
Publisher:PEARSON CO
Text book image
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Text book image
Production and Operations Analysis, Seventh Editi...
Operations Management
ISBN:9781478623069
Author:Steven Nahmias, Tava Lennon Olsen
Publisher:Waveland Press, Inc.