Scribd Logo
Upload

Welcome to Scribd!

  • Week 1 Class Activities - OPMT UCW

    Uploaded by

    Keeran
    4 views2 pages
    The document provides operational data for a process over four weeks. It includes units produced, labor costs, material costs, and overhead costs. To analyze productivity: 1) The multifactor productivity ratio, which compares output to total costs, increased slightly over the four weeks, indicating a small improvement in overall productivity. 2) The labor productivity ratio, comparing units produced to labor hours, was consistent in the first two weeks but increased in the last two weeks, suggesting improved labor productivity later in the period.

    Original Description:

    Original Title

    Week 1 Class Activities- OPMT UCW

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document provides operational data for a process over four weeks. It includes units produced, labor costs, material costs, and overhead costs. To analyze productivity: 1) The multifactor productivity ratio, which compares output to total costs, increased slightly over the four weeks, indicating a small improvement in overall productivity. 2) The labor productivity ratio, comparing units produced to labor hours, was consistent in the first two weeks but increased in the last two weeks, suggesting improved labor productivity later in the period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    4 views2 pages

    Week 1 Class Activities - OPMT UCW

    Uploaded by

    Keeran
    The document provides operational data for a process over four weeks. It includes units produced, labor costs, material costs, and overhead costs. To analyze productivity: 1) The multifactor productivity ratio, which compares output to total costs, increased slightly over the four weeks, indicating a small improvement in overall productivity. 2) The labor productivity ratio, comparing units produced to labor hours, was consistent in the first two weeks but increased in the last two weeks, suggesting improved labor productivity later in the period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    [OPERATIONS MANAGEMENT- CLASS ACTIVITY #1]

    The output of a process is valued at $100 per unit. The cost of labor is $50 per hour including benefits. The accounting
    department provided the following information about the process for the past four weeks:

    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

    Material ($) 21,041 24,523 20,442 18,364

    Overhead ($) 8,992 10,480 8,736 7,848

    a) Use the multifactor productivity ratio to see whether recent process improvements had any effect and, if so, when
    the effect was noticeable.

    Ans:

    Particulars Week 1 Week 2 Week 3 Week4


    Multifactor 1,124 1,310 1092 981
    Productivity (12,735+21,041+8,992) (14,842+24,523+10,840 (10,603+20,442+8,736) (9,526+18,364+7,848)
    Ratio )
    =0.0263 unit/ Dollar =0.0261 unit/ Dollar =0.0275 unit/ Dollar =0.0274/Dollar

    Note: Multifactor Productivity= Output

    Labour + Material + Overhead

    Based on the above calculation it can be seen that productivity in week 2 decreased by nominal value whereas

    increased in week 3 and ultimately it decreased in week 4. Overall, company's productivity has shown a slight improvement

    over the four-week period, as indicated by the increasing multifactor ratios for units per dollar.

    1
    [OPERATIONS MANAGEMENT- CLASS ACTIVITY #1]

    b) Has labor productivity changed? Use the labor productivity ratio to support your answer.

    Ans.

    Particulars Week 1 Week 2 Week 3 Week4


    Output 1,124 1,310 1,092 981

    Labour hours 12,735/$50 per hrs. 14,842/$50 per hrs. 10,603/$50 per hrs. 9,526/$50 per hrs.
    used ( labour =254.7 hours =296.84 hours =212.06 hours. =190.52 hours
    cost/ Labour
    hours rate)
    Labour 1,124 units 1,310 Units 1092 Units 981
    Productivity 254.7 hours 296.84 hours 212.06 hours. 190.52 hrs
    Ratio =4.41 units/ per hrs. =4.41 units/ per hrs. =5.15 units/ per hrs. =5.15 units/per hrs.

    Labour Productivity ratio= Unit Produced

    Labour hours used.

    The labor productivity ratio over the four-week period shows a mixed trend. In the first two weeks, the ratio

    remains constant at 4.41 units per hour, indicating consistent productivity levels. However, in the following two weeks,

    there is an increase in the ratio to 5.15 units per hour, suggesting improved productivity.

    You might also like