Old system

Staff 4

Working hourd per day 8

Units produced 8
Pay roll cost 640
Over head expenses 400

Labour productivity 0.25 0.25 0.25

Multifactor Productivity 0.007692

New system
Units produced 14
par roll cost 640
Overhead expenses 800
960
Labour productivity 0.4375

Multifacttor 0.00875 0.1875

75 Unifactor
0.001058
13.75 Multifactor
 labour productivity based on the labour

Based on the investment the part is actually all are the monetary value that is the inferanace
Labour mesaures only one factor
Multi gives a better picture yiu are looking at cost connected with the increase in output
Units produced 24000
Total labour hours 300

80 80
0.8

Output 240 crates per 100

Logs purchased 100
Labour hours 3 hours/log
Total labour hours 300 hours/day
Current labour productivity

labour costs 10/hour

Labour hours 300
Increase in labour hours 308

capital 350
Energy 150
Output 240

Labour 300 *10

3000

Capital 350
Energy 150
Material 1000
tptal 4500

Multifactor labour productivity 0.053333

Month Actual Sales

Jan 24500
Feb 27000
Mar 19950
Apr 26000 23816.67 Predicted avg april
May 21200 24316.67 Predicted avg May
Jun 18900 22383.33 Predicted avg for june Assume
Jul 17500 22033.33 Predicted avg for july 3 month moving avg
Aug 19000 19200 Predicted avg for august
Sep 18466.67 Predicted avg for sept
23816.67
2500
Month Load(Hrs)
May-20 ----
Jun-20 585
Jul-20 610
Aug-20 675
Sep-20 750
Oct-20 860 655
Nov-20 970 741.6667 Weights
0.5 871
0.3
Dec-20 773 0.2

Exponential smootheinig

F(t+1) = Ft + alpha(Dt- Ft) ft+1- Forecast for the current period

ft -Forecast for the previous period
Dt - actaul data for the previous period
alpha - the smoothening constant
if the valueas re clooser to 0 we give weights to initial periods ( jan
If values are close to 1 < 0.8/0/9/0/7) priority towards the recent y
How to fix the constant
we always start forecasting which is new we startwith smaller valu
Person inchage of production will assign the alpha value
 Month 1 Month 2 Month 3 Month 4 Month 5
100 90 105 95 ?

Month Weights
4 0.4
3 0.3
2 0.2
1 0.1

97.5
0.9

hts to initial periods ( jan / feb / march ) that is the distant periods
rity towards the recent years

we startwith smaller values assumption is distant periods have a greater weigtage

he alpha value
Week Demand Forecast Error
1 80 80
2 95 80 15
3 75 83 -8
4 110 81.4 28.6
120
5 100 87.12 12.88
6 90 89.696 0.304 100
89.757
80
Model paramater - Assume a smoothening constant of 0.2 60

40
Alpha 0.2
20
Assume DT = FT
if not given 0
1 2
 Demand VS Forecast
120

100

80

60

40

20

0
1 2 3 4 5 6

Demand Forecast
Period 1 2 3 4 5 6 7 8
Demand 10 18 29 15 30 12 16 8

Period Demand forecast Error Period Demand forecast Error

1 10 15 1 10 15
2 18 14.5 3.5 2 18 13.5 4.5
3 29 14.85 14.15 3 29 14.85 14.15
4 15 16.265 -1.265 4 15 19.095 -4.095
5 30 16.1385 13.8615 5 30 17.8665 12.1335
6 12 17.52465 -5.52465 6 12 21.50655 -9.50655
7 16 16.97219 -0.972185 7 16 18.65459 -2.654585
8 8 16.87497 -8.874967 8 8 17.85821 -9.85821

Demand VS forecast -1
35
35
30
30
25
25
20
20
15
15
10 10

5 5

0 0
1 2 3 4 5 6 7 8 1 2

Column B Column C
 Diffrence oChange from
%

-1 -0.285714 -29%
0 0 0
2.83 -2.237154 -224%
1.728 0.124662 12%
3.9819 -0.720752 -72%
1.6824 -1.730535 -173%
0.983243 -0.110788 -11%

Demand VS forecast -2
35

30

25

20

15

10

0
1 2 3 4 5 6 7 8

Column H Column I