Mack's 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 $260. Because some of the production process is​ automated, each guitar only requires 10 labor hours. Each employee works an average of 160 hours per month. Labor is paid at ​$10 per​ hour, materials cost is $42 per​ guitar, and overhead is $4,000.a. The labor productivity ratio for​ Mack's guitar fabrication shop is ​$___per hour. ​(Enter your response rounded to two decimal​ places.) b.The multifactor productivity ratio for​ Mack's guitar fabrication shop is __​(Enter your response rounded to two decimal​ places.) After some​ study, the operations manager Darren Funk recommends 3 options to improve the​ company's multifactor​ productivity:   follows≻Option​1: increase the sales price by 14 percent follows≻Option ​2: improve quality so that only 14 percent are​ defective, or follows≻Option ​3: reduce​ labor, materials, and overhead costs by 14 percent. If​ Mack's guitar fabrication shop decides to implement Darren​ Funk's option 1 to improve the multifactor​ productivity, the new productivity level would be ___ If​ Mack's guitar fabrication shop decides to implement Darren​ Funk's option 2 to improve the multifactor​ productivity, the new productivity level would be____If​ Mack's guitar fabrication shop decides to implement Darren​ Funk's option 3 to improve the multifactor​ productivity, the new productivity level would be ____     .

Practical Management Science
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ISBN:9781337406659
Author:WINSTON, Wayne L.
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Mack's 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 $260. Because some of the production process is​ automated, each guitar only requires 10 labor hours. Each employee works an average of 160 hours per month. Labor is paid at ​$10
per​ hour, materials cost is $42 per​ guitar, and overhead is $4,000.
a. The labor productivity ratio for​ Mack's guitar fabrication shop is ​$___per hour. ​(Enter your response rounded to two decimal​ places.)
b.The multifactor productivity ratio for​ Mack's guitar fabrication shop is __​(Enter your response rounded to two decimal​ places.)
After some​ study, the operations manager Darren Funk recommends 3 options to improve the​ company's multifactor​ productivity:
 
follows≻Option​1: increase the sales price by 14 percent
follows≻Option ​2: improve quality so that only 14 percent are​ defective, or
follows≻Option ​3: reduce​ labor, materials, and overhead costs by 14 percent.
If​ Mack's guitar fabrication shop decides to implement Darren​ Funk's option 1 to improve the multifactor​ productivity, the new productivity level would be ___
If​ Mack's guitar fabrication shop decides to implement Darren​ Funk's option 2 to improve the multifactor​ productivity, the new productivity level would be____
If​ Mack's guitar fabrication shop decides to implement Darren​ Funk's option 3 to improve the multifactor​ productivity, the new productivity level would be ____
 
 
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