A factory produces 7,000 units of car replacement component per month which can be sold at the price of $50/unit. The monthly labor cost is $1,000 per worker with 8 workers available, material cost is $5,000, and overhead cost is 20% of the material cost. A new machine can be added that will increase the output by 1000 units, decrease the number of workers by one, and increase the overhead cost by $3000. Compute the productivity growth

A factory produces 7,000 units of car replacement component per month which can be sold at the price of $50/unit. The monthly labor cost is $1,000 per worker with 8 workers available, material cost is $5,000, and overhead cost is 20% of the material cost. A new machine can be added that will increase the output by 1000 units, decrease the number of workers by one, and increase the overhead cost by $3000. Compute the productivity growth

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter4: Linear Programming Models

Section4.8: Data Envelopment Analysis (dea)

Problem 42P

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A factory produces 7,000 units of car replacement component per month which can be sold at the price of $50/unit. The monthly labor cost is $1,000 per worker with 8 workers available, material cost is $5,000, and overhead cost is 20% of the material cost. A new machine can be added that will increase the output by 1000 units, decrease the number of workers by one, and increase the overhead cost by $3000. Compute the productivity growth and justify whether the addition of the new machine is beneficial or not.
Mance Fraily, the Production Manager at Ralts Mills, can currently expect his operation to produce 1000 square yards of fabric for each ton of raw cotton. Each ton of raw cotton requires 5 labor hours to process. He believes that he can buy a better-quality raw cotton, which will enable him to produce 1200 square yards per ton of raw cotton with the same labor hours. What will be the impact on productivity (measured in square yards per labor-hour) if he purchases the higher quality raw cotton?
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1. A small furniture shop that focuses on making kitchen chairs produces 20,000 kitchen chairs annually. The shop is considering purchasing a new sanding machine; the machine will enable the workers to produce 30,000 chairs annually. Should the furniture shop proceed with the purchase of the new machine? a. Yes, the new machine would increase the labor productivity by 25%. b. Yes, the new machine would increase the labor productivity by 50%. c. No, the new machine would decrease the labor productivity by 50%. d. No, the new machine would increase the labor productivity by 25%. 2. Recently, Samsung released their latest flagship product, the S20. Which of the following best describes this technological development? a. General Purpose Technology b. New Invention c. Product Innovation d. Process Innovation 3. Moss is a casual video gamer. He is always curious on how do bots work in video games and how are they designed. Bots…
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Mariah Enterprises makes a variety of consumer electronicproducts. Its camera manufacturing plant is consideringchoosing between two different processes, named Alphaand Beta, which can be used to make two component partsA and B. To make the correct decision, the managers wouldlike to compare the labor and multifactor productivity ofprocess Alpha with that of process Beta. The value of processoutput for component A and B are $175 and $140 per unit,respectively. The corresponding overhead costs are $6,000and $5,000, respectively Process Alpha Process BetaProduct A B A BOutput (units) 50 60 30 80Labor ($) $1,200 $1,400 $1,000 $2,000Material ($) $2,500 $3,000 $1,400 $3,500a. Which process, Alpha or Beta, is more productive?b. What conclusions can you draw from your analysis?
An air-conditioner factory makes three different types of air-conditioners: the ceiling type, the cassette type and the wall-mounted type. Weekly sales of each type are 2, 4 and 6 pieces, at a price of €350, €450, and €500 each, respectively. The ceiling typecan be assembled in 1.5 hours, the cassette type in 1 hour and thewall-mounted type in 45 minutes. Labour cost is €40 per hour andthe current factory’s multi factor productivity is 2.2. a) Calculate the average cost per air-conditioner based on cur-rent multifactor productivity b) Calculate labor productivity (in euro per hour) for each typeof air-conditionc) Where the company should focus its efforts, based (i) on thelabor productivity, and (ii) on average cost?
An air-conditioner factory makes three different types of air-conditioners: the ceiling type, the cassette type and the wallmounted type. Weekly sales of each type are 2, 4 and 6 pieces, at a price of €350, €450, and €500 each, respectively. The ceiling type can be assembled in 1.5 hours, the cassette type in 1 hour and the wall-mounted type in 45 minutes. Labour cost is €40 per hour and the current factory’s multi factor productivity is 2.2.a) Calculate the average cost per air-conditioner based on currentmultifactor productivityb) Calculate labor productivity (in euro per hour) for each typeof air-conditionc) Where the company should focus its efforts, based (i) on thelabor productivity, and (ii) on average cost?
In December, General Motors produced 6,600 customized vans at its plant in Detroit. The labor productivity at this plant is known to have been 0.10 vans per labor hour during that month. 300 laborers were employed at the plant that month.a. How many hours did the average laborer work that month?b. if the productivity can be increased to 0.11 vans per labor hour, how many hours would the average laborer work that month?
The U.S. economy is becoming more and more service-based. The percentage of employment in manufacturing continues to decrease while the percentage employed in services continues to increase. However, it would be unwise to assume that manufacturing isn't important to the economy, or that service is more important. Let's see why. Not only is the percentage of manufacturing jobs decreasing, but the actual number of manufacturing jobs is also decreasing. There are two main reasons for the decline: increases in productivity, which means ewer workers are needed to maintain manufacturing output; and outsourcing, especially to countries that have much lower wages, an attractive option for companies seeking to maintain their competitiveness and boost their bottom lines. However, when companies outsource part (or in some cases, all) of their manufacturing to lower cost countries, the loss of jobs results in the loss of service jobs as well. Some are lost in the community in retail…