INDUSTRIAL

ENGINEERING AND
MANAGEMENT

WORK PROCCESS
ASSESSMENT
GROUP NO - 2

MADE BY:
1. OMKAR MANAPURE (3133)
2. DHANRAJ YEOLE (3118)
3. SUYASH SHINDE (3136)
4. SHUBHAM TAWARE (3106)
5. BHAVESH PATIL (3103)
CONTENT
 PROBLEMS ON PRODUCTIVITY
 PROBLEMS ON PRODUCTIVITY:
PROBLEM 1 : A company that makes shopping carts for supermarkets recently purchased
some new equipment that reduced the labor content of the jobs needed to produce
shopping carts.
The information regarding the old system (before adding the new equipment) and after
adding the new equipment are given below.

Current System New Equipment Added

Output/hr 80 84
Workers 5 4
Wage/hr $10 $10
Machine/hr $40 $50

a) Compute labor productivity for both the Old System and the New System
b) Compute AFP productivity for both the Old System and the New System
c) Suppose production with old equipment was 30 units of cart A at price of $100 per
cart, and 50 units of cart B at price of $120. Also suppose that production with new
equipment is 50 units of cart A, at price of $100 per cart, and 30 units of cart B at price
of $120. Compare all factor productivity for old and new systems.
Solution:
(a) Compute labor productivity
Old System : 80/5 = 16 units/worker
New System : 84/4 = 21units/worker
(b) Compute all factor productivity
Old System : 80 / (5×10 + 40) = 0 .89 units/$
New System : 84 / (4×10 + 50) = 0.93 units/$
(c) Now suppose:
Production with old equipment was 30 units of cart A at price of $100 per cart,
and 50 units of cart B at price of $120.
Production with new equipment is 50 units of cart A, at price of $100 per cart,
and 30 units of cart B at price of $120.
Compare all factor productivity for old and new systems.
AFP of the Old System =
[(30)(100)+(50)(120)] / [5×10 + 40] = 9000/90 = 100

AFP of the New System =

[(50)(100)+(30)(120)] / [4×10+50] = 8600/90 = 95.6
PROBLEM 2 : A company has introduced a process improvement that reduces
processing time for each unit so that output is increased by 25% with less
material but one additional worker required.
Under the old process, five workers could produce 60 units per hour. Labor
costs are $12/hour, and material input was $16/unit.
For the new process, material is now $10/unit. Overhead is charged at 1.6
times direct labor cost.
Finished units sell for $31 each.
a) Compute single factor productivity of labor in the old system. (Compute
it in four possible ways.)
b) Compute all factor productivity for both old and new systems.
Factor Old System New System
Output 60 60(1.25) = 75
# of workers 5 6
Worker cost $12/hr $12/hr
Material $16/unit $10/unit
Overhead 1.6(labor cost) 1.6(labor cost)
Price 31 31
Solution:
a) Compute labor productivity for the old system
Labor Productivity = 60/5 = 12 units per worker
Labor Productivity = [(60)(31)]/5 = 372 $ per worker
Labor Productivity = 60/[(5)(12)] = 1 unit per dollar
Labor Productivity = [(60)(31)]/[(5)(12)] = 31
b) Compute AFP
Since there is only a single output, in the numerator we can have either # or $.
Since it is all factor productivity, in the denominator we must have $
Old System
Denominator of all factor productivity is computed as
(5)(12) + (16)(60) + (1.6) (5)(12) = 1116
The numerator is (60)(31) = 1860
All factor productivity for old system = 1860/1116 = 1.67
REFERENCES:
• Productivity Improvement Using Industrial Engineering Tools – Case Study Of
a Typical Spinning Mil,Department of Production Engineering, 1Government
Engineering College Trichur, Thrissur, India
THANK
YOU!!!