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Seminar 1

1.

A health-check clinic has five employees and 'processes'


200 patients per week. Each employee works 35 hours per
week. The clinic's total wage bill is 3,900 and its total
overhead expenses are 2,000 per week. What are the
clinic's single-factor labor productivity and its multi-factor
productivity?

2.

John Lucy makes wooden boxes in which to ship


motorcycles. John and his three employees invest total of
40 hours per day making the 120 boxes.
a)What is their productivity?
b) If they can increase the rate to 125 per day, what will
be their new productivity?
c) What will be their percentage in productivity and
percentage change?

3. This year Oswal Inc. will produce 57600 hot water


heaters. Each employee works 160 hours per month. If the
labor productivity is 0.15 hot water heaters per labor
hours, how many laborers are employed at the plant?

4. Eric Jonson Makes billiard balls. He would like to know if his


organization can increase productivity by 3%. He has the
following data:

Units produced
Labor (hours)

Last year
1000
300

Now
1000
275

Resin (pounds)

50

45

Capital invested ($)

10000

11000

Energy(BTU) British
thermal units*~1050
joules

3000

2850

Cost
10$ per
hour
5$ per
pound
1% per
month of
investment
0.50$ per
BTU

5. Douglas Kosb is baker. Demands increase by 25%. He


made 1500 loaves per month. Labor productivity was
2.344 loaves per labor/hour. How many workers will
Douglas need to add? (160 labor hours per month.)

6. The pay will be 8$ per hour. He also will purchase one


blender (cost 100$ per month). But he will achieve the
same output if he increases labor hours. Which is the
best decision?
a)

By increasing labor hours from 640 to 660 Or By


increasing in investment?

b)

Show the percent productivity change for labor and


investment.

7. The output of a process is valued at 100$ per unit. The


cost of labor is 50$ per hour including benefits. The
accounting department provided the following
information about the process for the past four week:
Week 1 Week 2 Week 3 Week 4
Units
1124
1310
1092
981
produced
Labor ($)
12735
14842
10603
9526
Material
21041
24523
20442
18364
($)
Overhead
8992
10480
8736
7848
($)
a) Use the multifactor productivity ratio to see whether
recent process improvements had any effect and, if
so, when the effect was noticeable;
b) Has labor productivity changed? Use the labor
productivity ratio to support your answer.

8. Macks guitar fabrication shop produces low cost, highly


durable guitars for beginners. Typically, out of the 100
guitars that begin production each month, only 80
percent are considered good enough to sell. The other
20 percent are scrapped due to quality problems that
are identified after they have completed the production
process. Each guitar sells for $250 and required only 10
labor hours. Each employee works an average 160 hours
per month. Labor is paid at 10USD/hour, materials cost
is 40 USD/guitar, and overhead is 4000$.
a)
b)

Calculate the labor and multifactor productivity ratios.


After some study, the operations manager Daren Funk
recommends 3 options to improve the companys
multifactor productivity: (1) increase the sales price by 10
percent; (2) improve quality so that only 10 percent are
defective, or (3) reduce labor, material, and overhead
costs by 10 percent. Which option has the greatest
impact on the multifactor productivity measure?