Attiya Rauf (L1F10BBAM2311) Section: E Assignment # 4

Productivity
Bilal & Sons made wood doors. They made average 20 doors per day. They have hired 3 new workers for paint the doors. They together painted 12 doors in 8 hours. The labor average cost is Rs.6500, and material cost is Rs. 7050, the over head cost is Rs. 8000 and sell the door at price of 3000 per door. The monthly output is Rs 320k including finished goods and work in progress. The value of input including (Labor, Martial and Capital) is Rs 375k

Partial productivity
Partial productivity = output/labour Partial productivity = 12/3x8hr Partial productivity = 12/24 Partial productivity = 0.5 door/ hr. They painted half door in one hour.

Total factor productivity

Total factor productivity = output/labour + capital Total factor productivity = 3000*20/ 6500+8000+7050 Total factor productivity =Rs.60000 /Rs.21550 = 2.78

Total productivity
Total productivity = output / input Total productivity =320k/375k Total productivity =80.86%

Break Even Analysis

A shopkeeper wants to purchase ball point for selling, he has two option, one is piano pen and other one is Picasso pen. He want to do break even analysis to know about which pen he should buy so he will not face losses? The Break-Even point depends on the number of sales needed to generate revenue to cover costs the Break-Even chart is not time related

Total cost = fixed cost + total variable cost TC = cf + Vcv Total revenue = volume x price TR = V x P Profit = total revenue - total cost Z = TR TC = vp - (cf + Vcv)

Piano Pen
Fixed cost = Rs 7000 Variable cost = Rs 3 Price = Rs 5 per page Break Even point is V=fixed cost/price variable cost V=Rs7000/5-3 V=3500 Total cost=fixed cost + variable cost = Rs7000/- + 3(3500) =Rs 17500/Total revenue=volume x price = 3500 x 5 = Rs17500/The break even point occur where total revenue equal to total cost Profit=total revenue - total cost = Rs. 17500 - Rs. 17500 = Rs0/-

Picasso Pen
Fixed cost = Rs 5000 Variable cost = Rs 5 per page Price = Rs 10 per page

Break even point is

V=fixed cost/price variable cost V=Rs5000/10-5 V=1000 Total cost=fixed cost + variable cost = Rs5000/- + 5(1000) =Rs 10000/Total revenue=volume x price = 1000 x 10 = Rs10000/The break even point occur where total revenue equal to total cost Profit=total revenue - total cost = Rs10000/- - Rs10000/= Rs0/-

Break even analysis based process selection

Piano Pen = Picasso Pen cf + Vcv = cf + Vcv 7000+3V = 5000+5V 5V-3V = 7000-5000 2V =2000 V=2000/2 V=1000 If demand is below 1000 then purchase Picasso pen and if it is greater then 1000 then select Piano pen.

Earned Value Measure for Decision Tree

A shopkeeper makes decision about weather they buy new oven which have greater capacity then older one or repair the oven.

Decision Definition Decision to made

Decision Node Input:Cost of each decision Output:Decision Made

Chance Node Input:senario probablity reward if it occur Output: EMV

Net Path Value Compute:Payoffs minus cost along path

80% Strong Demand

New oven Invest 25K Rs.7.6K= New oven OR Repair oven Decision EMV= Rs.7.6K 0.8(10) + 0.2(-2) 35K

Rs. 10K
Rs.10k=35K-25K

20%
Weak Demand 23K

Rs. -2K
Rs.-2k=23K-25K

50% Strong Demand

15K Repair oven Invest 10K Rs.1K= 0.5(5) + 0.5(-3)

Rs.5k
Rs5K=15K-10K

50% Weak Demand

7K

Rs. -3K
Rs-3K=7K-10K