Abhishek Mishra || Operations Management || Sat 01-Jun-19

HW Chapter 1: 2, 4, 8

HW Problems for Chapter 1: 2, 4, 8

Ch1-Q2
a. Labor productivity ratio
Labor productivity = Output
Input Output
Input
Week Work Crew # of Workers Total Hours Shirts Shirts/Hour
1 Sud & Dud 2 24 68 2.83
2 Sud & Jud 2 46 130 2.83
3 Sud, Dud & Jud 3 62 152 2.45
4 Sud, Dud & Jud 3 51 125 2.45
5 Dud & Jud 2 45 131 2.91

b. Labor productivity pattern

 Labor productivity is reduced when all 3 workers are providing laundry service versus when only
2 are engaged
 Hypothetical reasons for reduced productivity when 3 workers are engaged can be either
competing resources (laundry machine, press, work area etc.) and/or not enough work as
forecasted
Ch1-Q4

Week 1 Week 2 Week 3 Week 4

Units Produced 1,124 1,310 1,092 981
Labor ($) 12,735 14,842 10,603 9,526
Materials ($) 21,041 24,523 20,442 18,364
Overhead ($) 8,992 10,480 8,736 7,848

Value Per Unit $100 $100 $100 $100

(1) 112,400 131,000 109,200 98,100
Total Value (Output)
Total Value (Input) (2) 42,768 49,845 39,781 35,738
(3)
Multifactor Productivity 2.628 2.628 2.745 2.745

Cost of Labor Per Unit $50 $50 $50 $50

Labor (hrs) 254.70 296.84 212.06 190.52
(3)
Labor Productivity (Units/Hr) 4.41 4.41 5.15 5.15

Week 1 Week 4 Improvement (4)

Multifactor Productivity 2.63 2.75 4.45%
Labor Productivity (Units/Hr) 4.41 5.15 16.68%

(1) Total Value (Output) = Units Produced * Value Per Unit

(2) Total Value (Input) = Labor + Materials + Overhead

(3) Productivity = Output

Input

(4) Improvement = Week 4 - Week 1 * 100

Week 1

a. Multifactor productivity pattern

 Multifactor productivity increased by 4.45% between Week 1 to Week 4
 Multifactor productivity improvement is evident from Week 3

b. Labor productivity
 Labor productivity too has improved by 16.68% between Week 1 to Week 4

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Ch1-Q8
Process Alpha Process Beta
A B Total A B Total
Units Produced 50 60 30 80
Value Per Unit $175 $140 $175 $140
Total Value (Output) (1) 8,750 8,400 17,150 5,250 11,200 16,450
Labor ($) 1,200 1,400 2,600 1,000 2,000 3,000
Materials ($) 2,500 3,000 5,500 1,400 3,500 4,900
Overhead ($) 6,000 6,000 5,000 5,000
Total Value (Input) (2) 14,100 12,900
Multifactor Productivity (3) 1.216 1.275
Labor Productivity (Units/Hr) (3) 6.596 5.483

Process Process
Comparison (4)
Alpha Beta
Multifactor Productivity 1.216 1.275 4.84%

Process Process
Comparison (4)
Beta Alpha
Labor Productivity (Units/Hr) 5.483 6.596 20.29%

a. Productivity comparison
 Process Beta has 4.84% higher Multifactor Productivity than Process Alpha
 Process Alpha has 20.29% higher Labor Productivity than Process Beta

b. Conclusions
 Process Beta is more profitable than Process Alpha because of the higher Multifactor Productivity
 Process Beta lags in Labor efficiency when compared to Process Alpha which is detrimental to its
profitability

(1) Total Value (Output) = Units Produced * Value Per Unit

(2) Total Value (Input) = Labor + Materials + Overhead
(3) Productivity = Output
Input

(4) Comparison = Higher value - Lower value * 100

Lower value

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