Assignment 1

Rohan Singh
 0650 -

Operations Management
Assignment 1.
Question 1
Multifactor Productivity
utputmaterials
A- 1. =

Output Units produced X Selling

Price Materials Raw Materials + Materials Purchased
=
-

(UP) (SPC
x

Raw Materials $5,000

=

Materials Purchased $25,000

=

UP 10,000 unite
= SP $10/ unit
=

Materials $5000
=

+ $25,000
$30,000
=

10,000
=> x 110 $100,000
=

Labour Cost Labour

= his X Labour rate

Labour (r 360 hrs

=

Labour rate =
$10/hr

360X$10 $36,000
=> =

5000st0
MFP =
2.40
=
=3.0: comparing the two scenarios, where the task was completed in 360 house

versus 500 hours (from example 8), there was an increase in the MFP.

This indicates that labor becomes more efficient, resulting higher productivity,
in

savings. The
time
and cost shorter completion suggests improved utilization of Labour, capital and

overall
technology, leading
to enhanced productivity.

A- 2 Goal -:
MFP remains the same 2.9
at

Letlabour rate be "n"

MFP ut- =

Labour + Materials

Labour : Labour houses X Labour rate

=360m

Materials $30,000
=

Output $100,000
=

2.9
30,000
=

- 2.9(360n 30,000 $100,000

+
- n
thr
=

By offering $3.45 per

an without
extra
affecting
hour

=>
$1,044n +$8.7,000 $100,000 theinitialMADof G.it impliesthattheincreaseene
#$9/hr from example
-

8. in productivity or output

1,044n
=>
$13,000
Pay=Bhin-
=

Extra $9
 I
B- T. Labour Cost 5%
=

decrease per
year
till 2030

MFP
($9x500)
0.04
=
=
X (1-0.05)

$4,500
=

0.95
x 14,275
=

Output $100,000 2
-100
=

=
Materials $30,000
=

Iro"soonen
Year Labour Cost Multifactor Productivity Based
5% each
on the table, it
would result
is evident that
in
decreasing
estimated
the Labor cost by
year an increase in Multifactor
Year 4500
Original 2.90
Productivity from 2.9 in 2023 to 3.02 2030. in This represents a

a4x100
growth of approximately 4.135%, calculated as
4275
25
2024
100,000 =
=
4.138%
4275x0.95 4061.25= 2.94
2025

100,000

4061.25x0.95 3858.19
=

2026

2027

2028

2029
&

2030

B -

2 MFP 2.9 units

=

Productivity
materials
Author
-

MFP(2027) 2.9 (1+0.02)

=

2.96.

Labour Cost MFP X

=

(1+0.02)

=2.9 x 1.02 2.96

=

Let Labour cost be 'n'

2.898=o0n =>
30,000+ a e
B 2 (Cont)
-

Similarly,for 2024-2030, we will alculate labor costs MFP

by raising by 1%.

I y
Year Multi-factor Productivity Labour Cost Difference in Labour to decrease in
labour
per year

2023
-

4,500
-
2.898

4500 3823.53 1
1,000
-

-
30,000 =
3023.53
= 15.03%
=

6 76.47 4500
2.898x(1.02) 2.96
=

2024 2.96
=

3823.53 -
3160.32

2025 2.96x(1.02) 3.02 =

-1,000
3.02
-
30,000
3160.32
=

-e555 17.35%
=

000-3000asthe grow-noe
5
2026 3.02x(1.02) 3.08
=

2027 3.08 x (1.02) 3.14

=

3. 14

-000

easterin
- 30,000
1241.11
=

2028 3.14 x (1.02) 3.2002

=
3.2002

1247.71 -
635.013

000 30,00
-

6535.013
2029 (1.02)
=

612.697
=

3.2002 x 3.2642
=

34.5397

on
635.013

000
-

-
30,000
34.5 i
=
=
94.5
2030 3.2642 x (1.02) 3.3295
=
=600.47

8The
· provided
table demonstrates that with a constant annual increase
of 2% MFP
in

[Marginal Factor Productivity) the labor cost experiences a

gradual incremental decrease. ("ceristis paribus")

Question 2
A) Tuition per term for credit hours $210
=

B) Average work hours per hour 35 his

-

Class
Average students Work period
=
=16 weeks
size 50

cost =$4,000
Energy
Overhead cost per class $25,000
=

Labour Hours 25x16

=

Material Cost
per student per class=$20 =400 his

Material Cost =

50
20 x

=$1,000
Studentees
Labour
Productivity ($/hr)
--
in

Total Student fees 210x3x50

=

=$31,500
=$500 $28.75r
=

Input cost Material Cost Overhead Cost Labour Productivity (instudent perhr)-
Energy Number
Student
+
= -

=$4,000 $20x50
+
+
$25,000

=$30,000
=AverageClassSie
Mi

herentere
= Ford
0.125

I I
= =
or
students
 Question 3

A Total Hours 40hns

=

Productivity:
tal
Outbt
Labour te

okut e
=

#
Labour hours- of workers X
#afHus Labour productivity y
=

1.25
=
units/how

6 workers
=

x 40 his

=240 hours

webent 358
=

Labour hours = 40
7 x 250
=

his

Labour Productivity 1.20 units/hr

3
=

Outbut 322
=

Labour Hours= 7 x 40 = 280 hrs

Labour Productivity 3
units/hr
1.15
=
=

-RY e

Labour Hours 8
= x 40

=320 hrs

productivity units/hr
5
Labour
=
1.10
=

or the
gradual decrease in labour
productivity from its highest Week 1
in 1.25 mit/has
at to 1.10 units/hr in Week 4
reflects the
changes

in output units, materials and workers.

 R

ran), I I
B worker manice known:

2
but T
6 45

45
Hours per week 40 his

Hourly wage
Material Cost $6
$12
=

=
=

MFP=
output
verse e

3 322 7 46 Overhead 1.5

=
L abour cost
X

selling price $140

=

per unit
4 354 z 48

Week 1 Week 2 Week 3

x
MAD
MADE
cox xs
are
yes a
15+ e

-- e

2850 4320 270

+ +

=00
5.6
=

8
Highest MAD occurs weekat5.623 andgradeagutteren
Week 4
maternal
·

cost,
and
*xzxnox1.540xs)
MFD workers.

560
= 5.0 1 2
=