
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Given the following information, calculate the multifactor productivity in terms of revenue per multifactor cost. (In other words, use money in the numerator and denominator.)
Units produced: 5,000
Standard price: $30/unit
Labor input: 500 hours
Cost of labor: $25/hour
Cost of materials: $5,000
Cost of overhead: 2x labor cost
A) State the formula
B) Determine the unit of measure for the numerator
C) Determine the unit of measure for the denominator
D) Calculate Productivity
D) Interpret the results
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Lillian Fok is president of Lakefront Manufacturing,a producer of bicycle tires. Fok makes 1,000 tires per day with thefollowing resources:Labor: 400 hours per day @ $12.50 per hourRaw material: 20,000 pounds per day @ $1 per poundEnergy: $5,000 per dayCapital costs: $10,000 per day
What is the labor productivity per labor-hour for these tires atLakefront Manufacturing?b) What is the multifactor productivity for these tires atLakefront Manufacturing?c) What is the percent change in multifactor productivity if Fokcan reduce the energy bill by $1,000 per day without cuttingproduction or changing any other inputs?
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Kleen Karpets cleaned 5000 square feet of rugs last month, consuming 400 hours of labor at $10 per hour, 100 gallons of solvent at $5 per gallon, and 20 days of machine rental at $25 per day. What is the multifactor productivity for the month as measured by square feet of rugs per dollar spent?
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A caterer prepares 2,000 meals for a client’ company event consuming the following resources:
Labor → 6 hours @ $20 per hour
Materials → $8 per meal
Beverages → $4 per meal
What is labor productivity?
What is the multifactor productivity?
To produce 2,000 pieces of luggage, a leather goods firm spends $1,000 on labor and $500 on materials. What is productivity? If the firms can increase production to 2,200 pieces of luggage with the same labor and material cost, what is the productivity? What is the percentage change? If the labor cost is reduced to $800 and materials increased to $600, what is the productivity to produce 2,200 pieces of luggage?
An accounting firm can produce 8 monthly reports in three 8-hour shifts. What is the productivity of this firm? If this firm hires two additional workers, what would be the productivity of this firm? What is the percentage of productivity gain?
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The manager of a crew that installs wood floors has tracked the crew’s output over the past several weeks. Each worker works 40 hours per week, and earns $22 per hour. The wholesale cost of lumber to the company is $9 per square foot, and the company charges its customers $25 per square foot of flooring installed. Overhead rate is 100%
a) using the best formula to determine labor productivity, calculate labor productivity for each of the weeks
b) calculate multifactor productivity for each week using the dollar revenue of flooring installed in the numerator
week
crew size
lumber used
flooring installed
week 1
4
480
420
week 2
3
371
325
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ABC Corporation is a furniture manufacturing company working on a 40 hour per week basis makes 135 chairs. The sales price is $75 each, and the company has the following costs:• Direct materials $790• Direct labor $360• Overhead $550Required:a. Calculate the productivity of the company.b. What will be the new productivity if the company decides to make 150 chairs per week?c. If the company decides to improve productivity through materials costs reduction only, how much these costs must be reduced in order to achieve a 10 percent increase in total productivity?d. If the company repeats the same exercise as in (c) above, but through labor costs reduction, how much these costs must be reduced in order to achieve a 10 percent increase in total productivity?
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Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes
1,000
tires per day with the following resources:
Labor:
400
hours per day @
$12.00
per hour
Raw Material:
20,000
pounds per day @
$1.00
per pound
Energy:
$5,250
per day
Capital:
$10,000
per day
a) Labor productivity per labor hour for these tires =
2.502.50
tires/labor hour (round your response to two decimal places).
b) Multifactor productivity for these tires =
0.02500.0250
tires/dollar (round your response to four decimal places).
c) 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 =
nothing%
(enter your response as a percentage rounded to two decimal places).
Note: calculate the new multifactor productivity to four…
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Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes
1,000
tires per day with the following resources:
Labor:
400
hours per day @
$12.50
per hour
Raw Material:
21,000
pounds per day @
$1.00
per pound
Energy:
$5,000
per day
Capital:
$10,000
per day
a) Labor productivity per labor hour for these tires =
2.52.5
tires/labor hour (round your response to two decimal places).
b) Multifactor productivity for these tires =
0.02440.0244
tires/dollar (round your response to four decimal places).
c) 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 =
nothing%
(enter your response as a percentage rounded to two decimal places).
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The following table shows data on the average number of customers processed by several bank service units each day. The hourly wage rate is $25, the overhead rate is 1.0 times labor cost, and material cost is $5 per customer.Unit EmployeesCustomersProcessed/DayA 4 36B 5 40C 8 60D 3 20a. Compute the labor productivity and the multifactor productivity for each unit. Use an eighthour day for multifactor productivity.b. Suppose a new, more standardized procedure is to be introduced that will enable each employeeto process one additional customer per day. Compute the expected labor and multifactor productivity rates for each unit.
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A shoe factory produces 95,000 shoes each week. The equipment used costs $15,000 and will remain productive for three years. The labor cost per year is $16,000. What is the productivity measure of “units of output per dollar of input” averaged over the three-year period?
Hint: Productivity = total units produced divided by the total labor cost plus total equipment cost
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Explain the meaning of the saying that productivity is a relative measure briefly .
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Consider the information given below.
Output
Inputs
335,000 units
6,400 labor hours @ $14.00 per hour
Sales price = $1,301.00/unit
Material cost = $41,250,000
Utilities cost = $4,600
Calculate the single factor productivities and the total productivity. Do not round intermediate calculations. Round your answers to two decimal places.
Labor productivity: $/labor$
Material productivity: $/material$
Utilities productivity: $/utility$
Total productivity: $/input$
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The following data is for production of chocolate bars over a four-week period. Assume 40-hour weeks and an hourly wage of $12. Overhead is 1.5 times weekly labor cost. Material cost is $6 per pound.
Week
Output (units)
Worker
Material (lbs.)
1
2
3
4
30,000
33,600
32,200
35,400
6
7
7
8
450
470
460
480
Compute the multifactor productivity measure for each of the four weeks.
What do the figures suggest? Compute the productivity growth from week 1 to week 4.
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