Homework –Productivity measurement

1. Table 1 shows data for two consecutive years, 2013 and 2014 respectively including inputs and outputs for
Company ST.
Table 1: Data from Company ST

Year
Item
2013 2014
Product
Finished goods (unit) 50,000 94,000
Price (RM/unit) 30 34
Work In Progress (WIP) (unit) 1,500 2,000
Percent completion for WIP 50% 60%

Workers
Wage (RM/hour) 6.50 6.70
Number of workers 30 30
Working hours for a worker (hour/month) 160 160
Materials
Annual weight of materials (kg) 10,000 14,000
Price (RM/kg) 40 50
Energy
Annual electrical usage (kWh) 30,000 40,000
Price (cents/kWh) 45 50
Capital
Annual value (RM) 225,000 228,000
Deflator 1.0 1.2

a) Compare the total productivity for year 2013 and 2014. Provide your comments on the performance of the
company for both years.
(8 marks)

b) Determine which input between workers and materials, contributes more to the productivity for year 2014?
(3 marks)

c) If productivity is expected to increase by 5% from year 2014, determine the number of workers required
monthly for 2015. Assume outputs are fixed in 2014 as given in Table 1.
(4 marks)