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    Lecture 7

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    Lecture 7

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    Lecture 7

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    MIRPUR UNIVERSITY OF SCIENCE AND TECHNOLOGY (MUST), MIRPUR

    MUST BUSINESS SCHOOL


    Operations Management
    MBA-643
    Lecture No. 7 : Productivity Numerical

    ADEEL RAZAQ
    Lecturer
    LEARNING OBJECTIVES

    Able to solve productivity Numerical.

    Operations Management
    Productivity Equation
    productivity = Total Output / Total Input.
    Numerical will be solved on whiteboard of Teams App
    Q1. A company that processes fruits and vegetables is able to
    produce 400 cases of canned peaches in one-half hour with four
    workers. What is labor productivity?
    Q2. A wrapping-paper company produced 2,000 rolls of paper
    one day. Labor cost was $160, material cost was $50, and
    overhead was $320. Determine the multifactor productivity.
    Q3. Compute the multifactor productivity measure for an eight-
    hour day in which the usable output was 300 units, produced
    by three workers who used 600 pounds of materials. Workers
    have an hourly wage of $20, and material cost is $2 per pound.
    Overhead is 1.5 times labor cost.
    Cont…
    Q4. Determine the multifactor productivity for the combined input of
    labor and machine time using the following data:
    Output: 7,040 units Input
    Labor: $1,000
    Materials: $520
    Overhead: $2,000
    Q5. Determine the productivity for these cases:
    a. Four workers installed 720 square yards of carpeting in eight
    hours.
    b. A machine produced 70 pieces in two hours. However, two pieces
    were unusable.
    Cont…
    Q6. A catering company prepared and served 300 meals at an anniversary celebration
    last week using eight workers. The week before, six workers prepared and served 240
    meals at a wedding reception.
    a. For which event was the labor productivity higher? Explain.
    b. What are some possible reasons for the productivity differences?
    Q7. The manager of a crew that installs carpeting has tracked the crew’s output over
    the past several weeks, obtaining these figures:
    Week Crew Size Yards Installed
    1 4 96
    2 3 72
    3 4 92
    4 2 50
    5 3 69
    6 2 52
    Compute the labor productivity for each of the weeks. On the basis of your
    calculations, what can you conclude about crew size and productivity?
    Cont…
    Q8. Compute the multifactor productivity measure for each of the
    weeks shown for production of chocolate bars. What do the
    productivity figures suggest? 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) Workers Material (lbs)


    1 30,000 6 450
    2 33,600 7 470
    3 32,200 7 460
    4 35,400 8 480
    Cont…
    Q9. A company that makes shopping carts for supermarkets and other stores recently purchased
    some new equipment that reduces the labor content of the jobs needed to produce the shopping
    carts. Prior to buying the new equipment, the company used five workers, who produced an
    average of 80 carts per hour. Workers receive $10 per hour, and machine cost was $40 per hour.
    With the new equipment, it was possible to transfer one of the workers to another department,
    and equipment cost increased by $10 per hour while output increased by four carts per hour.
    a. Compute labor productivity under each system. Use carts per worker per hour as the measure
    of labor productivity.
    b. Compute the multifactor productivity under each system. Use carts per dollar cost (labor plus
    equipment) as the measure.
    c. Comment on the changes in productivity according to the two measures, and on which one you
    believe is the more related for this situation.

    Q10. An operation has a 10 percent scrap rate. As a result, 72 pieces per hour are produced.
    What is the potential increase in labor productivity that could be achieved by eliminating the
    scrap?
    Cont…
    Q11. A manager checked production records and found that a worker produced 160 units while
    working 40 hours. In the previous week, the same worker produced 138 units while working 36
    hours. Did the worker’s productivity increase, decrease, or remain the same? Explain.

    Q12. A company offers ID theft protection using leads obtained from client banks. Three
    employees
    work 40 hours a week on the leads, at a pay rate of $25 per hour per employee. Each employee
    identifies an average of 3,000 potential leads a week from a list of 5,000. An average of 4
    percent
    actually sign up for the service, paying a one-time fee of $70. Material costs are $1,000 per
    week,
    and overhead costs are $9,000 per week. Calculate the multifactor productivity for this
    operation in
    fees generated per dollar of input.
    Recommended Book/Material

    Operations Management Latest Edition by William J Stevenson

    Operation Management Latest Edition by Jay Heizer (Author), Barry Render

    Operations Management

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