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Productivity Problems
Problem 1.1
John Lucy makes wooden boxes in which to ship motorcycles. John and his three employees
invest
40 hours per day making the 120 boxes.
(a) What is their productivity?
(b) John and his employees have discussed redesigning the process to improve efficiency. If
they
can increase the rate to 125 per day, what would be their new productivity?
Eric Johnson makes billiard balls in his New England plant. With recent increases in his
costs, he has a newfound interest in efficiency. Eric is interested in determining the
productivity of his organization. He would like to know if his organization is maintaining the
manufacturing average of 3% increase in productivity. Re has the following data representing
a month from last year and an equivalent month this year:
Show the productivity percentage change for each category and then determine the
improvement for labor-hours, the typical standard for comparison.
ANSWER:
Resin 1, 000
= 20
1, 000
= 22.22 2.22 2.22
= 11.1%
50 45 20
Capital 1, 000
= 0.1
1, 000
= 0.09 –0.01 –0.01
= –10.0%
10, 000 11, 000 0.1
Energy 1, 000
= 0.33
1, 000
= 0.35 0.02 0.02
= 6.1%
3, 000 2, 850 0.33
PROBLEM 1.9
David Upton is President of Upton Manufacturing, a producer of Go-Kart tires. Upton makes
1000
tires per day with the following resources:
(a) What is the labor productivity for these tires at Upton Manufacturing?
Unit produced: 1000 tires
(b) What is the multifactor productivity for these tires at Upton Manufacturing?
(c) What is the percent change in multi-factor productivity if Upton can reduce the energy bill
by $1,000 without cutting production or changing any other inputs?