Chapter AE, Problem AE1.1

Explanation of Solution

a.

Time taken by employees for completing the special project in Denver plant:

Special project at Denver involves Market Analysis, Quota computation, Sourcing review and Production planning.

• Time taken by employees for Quota computation is “22+30+17+31=100” hours.
• Time taken by employees for Market analysis is “17+21=38” hours.
• Time taken by employees for sourcing review is “9+22+10+21+5=67” hours.
• Time taken by employees for production planning is “12+15+21+35+20+19=122 hours”

Therefore, time taken by employees for completing the special project in Denver plant is “327”hours.

Explanation of Solution

b.

Time taken by employees for completing the special projects in Reno plant:

Special project at Reno plant involves Quota computation, Sourcing review and Production planning.

• Time taken by employees for Quota computation is “27+42=69” hours.
• Time taken by employees for Sourcing review is “17+23+21+27=88” hours.
• Time taken by employees for Production planning is “19+20+11=50” hours.

Therefore, the time taken by employees for completing the special project in Reno plant is “207” hours.

c.

Explanation of Solution

Time taken by employees for Quota Computation in Chicago plant:

Time taken by employees for special project at Chicago plant for Quota computation is: “27+12+22+29+11+29 = 130” hours.

Therefore, the time taken by employees for computation in Chicago plant is “130” hours.

Explanation of Solution

d.

Total time taken by employees for Quota Computation for all plants:

Time taken by employees for special project at Chicago plant, Denver plant and Reno plant for Quota computation is:

• Time taken by employees for Quota computation in Denver plant is “22+30+17+31=100” hours.
• Time taken by employees for Quota computation in Reno plant is “27+42=69” hours.
• Time taken by employees for special project at Chicago plant for Quota computation is: “27+12+22+29+11+29 = 130”hours.

Therefore, the total time taken by employees is: “100+69+130=299” hours.

Explanation of Solution

e.

Total labor cost for all employees in the Quota computation project:

• Suppose the hourly pay of an employee is “$30”.
• The number of hours worked by the employees on Quota computation project is “299” hours.

       Labor cost= hourly wage × number of hours = 30 × 299 = $8970

Therefore, the total labor cost for all employees in the quota computation project is   “8970$”.

Explanation of Solution

f.

Comparison of labor hour total for Quota computation with other projects:

• The total time taken by employees for Quota computation is: “100+69+130=299” hours.
• The total time taken by employees for market analysis is “38” hours.
• The total time taken by employees for sourcing review is “67+88+52=207” hours.
• The total time taken by employees for production planning is “122+75+50 =247” hours.

Thus, the ratio of Quota computation with Market analysis = 299/38=7.86 hours, the ratio of Quota computation with sourcing review = 299/207=1.44 hours, and the ratio of Quota computation with production planning = 299/247= 1.21 hours.

Explanation of Solution

g.

Conclusion:

From the above questions, it can be observed that Quota computation almost takes “37%” of the total time taken to complete all projects as compared to the projects – market analysis, sourcing review and production planning.

Therefore, it can be said that the labor employed in Quota computation project is less efficient as compared to the other three projects.