Comparison of Proficiency of Workers

Definition
In engineering economy, the comparison of proficiency of workers entails evaluating the
efficiency and effectiveness of workers in completing tasks or projects within a given economic
context to optimize productivity and maximize economic returns.
Formula
Sample Problem
Two workers, A and B, each produce 200 pieces of a product per hour. Because of defects, 2% of
the pieces produced by B are rejected. These defective pieces are repaired at a unit cost of P0.60
per piece. The cost of materials per piece is P2.50.
(a) If each worker is paid P20.00 per hour, determine the cost per acceptable piece.
(b) How much should A receive per hour in order that his cost per acceptable piece will equal
that of B?
A. Worker A:
P2.50
Material Cost = X 200 pcs = P500
hr
Wage = P20
Total = P500 + P20 = P 520
P520
Cost per piece of acceptable piece = = P 2.60
200 pcs
B. Worker B:
P 2.50
Material Cost = X 200 pcs = P500
hr
Wage = P20
P 0.60
Repair Cost = X 0.02(200 pcs) = P2.40
hr
Total = P500 + P20 +P2.4 = P 522.40
P 100
Operation Cost =
hr
P 52 2.4
Cost per piece of acceptable piece = = P 2.6653
196 pcs
 X +5 0
B. = P 2.6653
20 0 pcs
X = 2.6653(200) – 500 = Php 33.06
Additional Problem
Two workers, A and B, produce the same product on identical machines. A receives P12.50 per
hour and he produces 100 units per hour. B is able to produce 120 units per hour. The machine
rate or cost of operation of the machines used by them is P50.00 per hour.
(a) Determine the cost per piece for worker A and
(b) Determine the hourly wage of worker B in order that his cost per piece will equal that of A.
Solution:
Daily wage of A per hr + Cost of machine per hr
(a) Total Cost for worker A =
Total No .of pieces produced by worker A
P 12.50 P 50 P 6250
+
hr hr hr
= = = P 0.625 per unit
units units
100 100
hr hr
(b) Given: The cost per piece of B will equal that of A.
Daily wage of B per hr +Cost of machine per hr
From the equation: Total cost for worker B =
Total No .of pieces produced by worker B
P 0.625
=
unit
Daily wage of B per hr +Cost of machine per hr
Total No .of pieces produced by worker B
P 0.625 Daily wage of B per hr +50 per hr
=
hr 120 units /hr
P 0.625 P 120 units Daily wage of B per hr P 50
x = +
unit hr hr hr
P 75 Daily wage of B per hr P 50
= +
hr hr hr
P 75 – 50 = Daily Wage of B
Or Daily Wage of B = P 25 per hour
NOTE that a 20 % increase (120 units of B – 100 units of A) in production per hour entitles
P 25−P 12.5 P 12.5
worker B to increase in hourly wage of 100% x100% = X100% = 100%
P12.5 P 12.5
Chapter 1.2 Present Economy - Chapter 1 – Present Economy Continuation BES 215 – ENGINEERING -
Studocu