GROUP

FACULTY OF BUSINESS AND ACCOUNTANCY

UNIVERSITI SELANGOR

TEST 1
COURSE : OPERATIONS MANAGEMENT
COURSE CODE : PMS3123
LECTURER : MADAM NAFIZA MAHAYUDDIN
Please fill in the following particulars:

NAME : MUHAMMAD HARIF BIN AMIRUDDIN

: 4 2 1 3 0 0 1 6 9 1
STUDENT ID

GROUP : GROUP 1

QUESTION Course Learning Outcome MARKS

1 CLO 1: Students will be able to describe the basic concept of /10

operations management principles (C2, PLO 1)

TOTAL /10

1
 PMS3123/32234/TEST1

Answer the following questions:

Premier Production Sdn. Bhd. intends to assess its current productivity level. The
company is considering adopting a new system to increase its productivity level. The
current system has been able to produce 5000 units with its current facilities require 250
labour hours that cost RM10 per hour, RM 1,000 of materials, RM400 of capitals and
RM100 of overheads. While the proposed system capacity will increase the number of
outputs to 1,500 units than before that require 300 labour hours and the cost remain the
same. Other measurements remain constant.

a. Using the single factor: labour hour and multiple factor productivity
measurement, what is the productivity level of Premier Production Sdn. Bhd?
(6 marks)
b. What is the rate of increase in productivity for current and new system (single and
multiple factor)?
(4 marks)

END OF TEST QUESTIONS

ANSWER:

a) Current System Productivity = output / input (labor hours)

= 5000 UNIT / 250 Labor Hours
= 20 Unit per hour

Proposed system Productivity = 1500 Unit / 300 Labor Hours

= 5 Unit per hour

Multiple factor productivity = output / (sum of input)

Multiple factor for current productivity = 5000 unit / ( 2500 labor hours+ 1000 materials+ 400
capital+ 100 overhead)
= 5000 Unit/ 4000
=1.25 unit per hours

Multiple factor for Proposed productivity = 1500 unit / ( 3000 labor hours+ 1000 materials+ 400
capital+ 100 overhead)
= 0.33 unit per hour

b) Increase Rate = ( New Productivity – Current Productivity) / Current Productivity * 100

= (5 unit – 20 unit) / 20 unit * 100%

= -75%

Multiple factor increase Rate = (0.33 unit – 1.25 unit) / 1.25 unit * 100%

= -73.33%