Production

693 Words Mar 7th, 2015 3 Pages
1.1 Chuck Sox makes wooden boxes in which to ship | motorcycles. Chuck and his three employees invest a total of 40 | hours per day making the 120 boxes. | a) What is their productivity? | | Total hours invested in production=40 hours per day | | produced number of boxes in a day=120 | | | | Productivity per day is =units produced/input used | | productivity per day is =120 boxes/40 hours | | productivity per day = 3 boxes per day | | | | their producivity is 3 boxes per day | | | b) Chuck and his employees have discussed redesigning the process | to improve efficiency. If they can increase the rate to 125 | per day, what will be their new productivity? | | | | New productivity=Units …show more content…
| | | | | Labor productivity = Total units produced/Total Labor hours | | Labor productivity = 100 tires / 400 hours | | Labor productivity = 2.5 tires per hour hour | | | | b) What is the multifactor productivity for these tires at | Lakefront Manufacturing? | | | | | Labor is 400 hours * $12.50= $5,000 | | Raw materialis 20,000 lbs * $1 =$20,000 | | Energy =$5,000 | | Capital Costs = $10,000 | | Total multifactor cost per day =$40,000 | | | | | Multifactor productivity per dollar = units produced/Total multifactor cost | | multifactor productivity per dollar = 1,000 tires / $40,000 | | | | | Multifactor productivity per dollar = 0.025 tires per dollar | | | | c) What is the percent change in multifactor productivity if Fok | can reduce the energy bill by $1,000 per day without cutting | production or changing any other inputs? P | | | | | Total multifactor productivity cost = $40,000 | | minus reduction in energy cost = $1,000 | | Total multifactor productivity cost = $39,000 | | | | | Productivity per dollar = units produced/Total cost | | Productivity per dollar = 1,000/$39,000 | | Productivity per dollar = 0.026 per labor dollar | | | | | Percentage change in productivity = 0.026-0.025/0.026 | | Percentage change in productivity = 0.038 or 3.85% | 1.13 Charles Lackey operates a bakery in Idaho Falls, Idaho. | Because of its excellent product and

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