4 A workers utility function is defined asfollows:U = 4 L1/4 c3/4Time endowment is 60 hoursThe current wage rate w = $20/2-hourslot (the workers cannot work singlehours – the minimum slot is 2 hours)a) Find the value of consumption, leisureand labour supply. Find the Utility of theWorkerb) How does the labour supply change isthe worker now get a bonus of $100regardless of number hours worked? Isleisure normal or inferior.c) Now assume that the wages fall to$10/2-hour – how does the labour supplychange – what can we conclude aboutsubstitution and income effect. By howmuch is the consumer worse off ascompared to the first case when wage =$10/2-hour

A Small Introduction about Supply Management Supply Chain Management (SCM) is the discipline that…

Answered: a) Find the value of consumption,…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Mack’s guitar fabrication shop produces low-cost, highly durable guitars for beginners. Typically, out of the 100 guitars thatbegin production each month, only 80 percent are consideredgood enough to sell. The other 20 percent are scrapped due toquality problems that are identified after they have completedthe production process. Each guitar sells for $250. Becausesome of the production process is automated, each guitar onlyrequires 10 labor hours. Each employee works an average160 hours per month. Labor is paid at $10/hour, materials costis $40/guitar, and overhead is $4,000.a. Calculate the labor and multifactor productivity ratios.b. After some study, the operations manager Darren Funkrecommends three options to improve the company’smultifactor productivity: (1) increase the sales price by10 percent, (2) improve quality so that only 10 percentare defective, or (3) reduce labor, material, and overheadcosts by 10 percent. Which option has the greatest impacton the multifactor…
Manufacturers Inc. (MI) currently has a labor force of 10, which can produce 600 units per period. The labor cost is now $5000 per period per employee. The company has a long-standing rule that does not allow it to make use of any overtime. In addition, the product cannot be subcontracted, due to the specialized nature of the machinery that MI uses to produce it. As a result, MI can only increase/decrease production by hiring or laying off employees. The cost is $10000 to hire or lay off an employee. Inventory carrying costs are $200 per unit for any unsold items at the end of the period. The inventory level at the beginning of period 1 is 400 units. The forecast demand is 700 in period 1,600 in period 2,450 in period 3, 250 in period 4,500 in period 5, and 550 in period 6. a.) Compute the costs of the Chase Demand Strategy. b.) Compute the costs of the Level Strategy c.) Compare the costs of the two strategies. Which one is superior?
Manufacturers Inc. (MI) currently has a labor force of 10, which can produce 600 units per period. The labor cost is now $5000 per period per employee. The company has a long-standing rule that does not allow it to make use of any overtime. In addition, the product cannot be subcontracted, due to the specialized nature of the machinery that MI uses to produce it. As a result, MI can only increase/decrease production by hiring or laying off employees. The cost is $10000 to hire or lay off an employee. Inventory carrying costs are $200 per unit for any unsold items at the end of the period. The inventory level at the beginning of period 1 is 400 units. The forecast demand is 700 in period 1,600 in period 2,450 in period 3, 250 in period 4,500 in period 5, and 550 in period 6. a.) Compute the costs of the Chase Demand Strategy.
A sheet metal operator is told that his standard is 1.875 hours per 100 units. If his wage is $16/hour and he makes 800 units in 12 hours, what are his earnings? (use incentive method)
A company is able to produce 2,350 units of product A monthly. This level of production requires spending $1,000 on labor, $520 on materials, and $2,000 on overhead expenses. Calculate the multifactor productivity. Assuming the company can increase its production to 2,850 units, following an increase of materials expenses to $960, and labor expenses to 1,240. Is it worthy to increase the production level? Justify.
Suppose there are two inputs in the production function, labor and capital, and these two inputs are perfect substitutes. The existing technology permits one machine to do the work of three workers. The firm wants to produce 100 units of output. Suppose the price of capital is $750 per machine per week. What combination of inputs will the firm use if the weekly salary of each worker is $300? What combination of inputs will the firm use if the weekly salary of each worker is $225? What is the elasticity of labor demand as the wage falls from $300 to $225?
Given the following data on inputs and outputs at a work center, determine the cumulative deviation and the backlog for each time period. The beginning backlog is 7.PERIOD1 2 3 4 5 6Input Planned 200 200 180 190 190 200Actual 210 200 179 195 193 194PERIOD1 2 3 4 5 6Output Planned 200 200 180 190 190 200Actual 205 194 177 195 193 200
Answer the following questions applying the Constant Workforce strategy assuming: one daily shift of 8 hours, a $10 hour salary, a hiring cost of $400, a firing cost of $500, a storage cost of $10 , and a late order cost of $20. January February March April May June Total 1 Days 21 20 23 21 22 22 129 2 Units per Worker 126 3 Demand 1840 4068 3980 3540 3180 2642 19250 4 Workers Needed 5 Workers Available 30 6 Workers Hired 7 Hiring Cost 8 Workers Fired 9 Firing Cost 10 Current Workers 11 Labor Cost 12 Produced Units 13 Net Inventory 14 Storage Cost 15 Late Orders Cost 16 Total Cost a) Labor cost in January: b) Net inventory in April: c) Late…
LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.0 hours of direct labor at the rate of $26.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The budgeted direct labor cost per unit of Product WZ would be: $78.00 $7.00 $26.00 $46.00
Mark Tuan, the Production Manager at MT Mills, can currently expect his operation to produce1000 square yards of fabric for each ton of raw cotton. Each ton of raw cotton requires 5 laborhours to process. He believes that he can buy a better-quality raw cotton, which will enable himto 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 hepurchases the higher quality raw cotton? You are required to calculate: a) Productivity for the current raw cotton? b) The new productivity if Mark Tuan use the new raw cotton. c) What is the percentage increase in productivity?
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…
Manufacturing Aggregate Planning Manufacturers Inc. (MI) currently has a labor force of 10, which can produce 600 units per period. The labor cost is now $5000 per period per employee. The company has a long-standing rule that does not allow it to make use of any overtime. In addition, the product cannot be subcontracted, due to the specialized nature of the machinery that MI uses to produce it. As a result, MI can only increase/decrease production by hiring or laying off employees. The cost is $10000 to hire or lay off an employee. Inventory carrying costs are $200 per unit for any unsold items at the end of the period. The inventory level at the beginning of period 1 is 400 units. The forecast demand is 700 in period 1,600 in period 2,450 in period 3, 250 in period 4,500 in period 5, and 550 in period 6. a.) Compute the costs of the Chase Demand Strategy. b.) Compute the costs of the Level Strategy c.) Compare the costs of the two strategies. Which one is superior?

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