Concept explainers
a)
To determine: The labor productivity per labor hour of Company LF.
Introduction: Labor productivity is the valuation of
a)
Answer to Problem 8P
The labor productivity of Company LF is 2.5 tires per hour.
Explanation of Solution
Given information:
Company LF is manufacturing 1,000 tires per day with 400 labor hours per day.
Formulae to calculate labor productivity:
Calculate labor productivity:
The labor productivity is calculated by dividing the total output by the total input.
Therefore, the labor productivity of Company LF is 2.5 tires per hour.
b)
To determine: Multifactor productivity of Company LF.
Introduction: Multifactor productivity is an evaluation of economic performance that compares the amount of products and services produced to the amount of combined input used to produce those products and services.
b)
Answer to Problem 8P
The multifactor productivity of Company LF is 0.025tiers per dollar.
Explanation of Solution
Given information:
Company LFproduces 1,000 tiers per day with 400 labor hours at the cost of $12.50 per hour. Raw materials of 20,000 pounds per day were used at the cost of $1 per pound. Energy cost is $5,000 per day and capital cost is $10,000 per day.
Formula:
Calculate multifactor productivity:
The multifactor productivity is calculated by dividing the total goods producedwith the total values of resources used to produce the total goods.
Therefore, the multifactor productivity of Company LF is 0.025 tires per dollar.
c)
To determine: The percentage change in multifactor productivity if the company reduces the energy bill by $1,000 per day.
c)
Answer to Problem 8P
The percentage change in multifactor productivity is 2.56%.
Explanation of Solution
First, calculate the change in multifactor productivity.
Given information:
The energy cost is reduced by $1,000 per day.
Formula:
The change in multifactor productivity is calculated by dividing the total goods producedwith the total values of resources used to produce the total goods. The initial multifactor productivity must be subtracted from the change in multifactor productivity value.
Hence, the change in multifactor productivity is 0.00064 tires per dollar.
Calculate the percentage change in multifactor productivity:
Formula:
Calculate percentage change:
The percentage change in productivity is calculated by dividing the change in productivity units with initial productivity.
Therefore, the percentage change in productivity is 2.56%.
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Chapter 1 Solutions
PRIN.OF OPERATIONS MANAGEMENT-MYOMLAB
- In December, General Motors produced 6,600 customized vans at its plant in Detroit. The labor productivity at this plant is known to have been 0.10 vans per labor hour during that month. 300 laborers were employed at the plant that month.a. How many hours did the average laborer work that month?b. if the productivity can be increased to 0.11 vans per labor hour, how many hours would the average laborer work that month?arrow_forwardLillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes 1,200 tires per day with the following resources: Labor: 400 hours per day @ $12.00 per hour 20,000 pounds per day @ $1.50 per pound $5,250 per day $10,250 per day Raw Material: Energy: Capital: a) Labor productivity per labor hour for these tires = tires/labor hour (round your response to two decimal places). b) Multifactor productivity for these tires tires/dollar (round your response to four decimal places). %3Darrow_forwardPak Andi is a director of a cake factory in the Bekasi area. To produce 900 cakes per day it takes the following things: Labor 300 hours per day @ $ 96 per hour Raw material 3 tons per day @ $ 2 per kg Energy $ 10,000 per day Capital cost $ 5,000 per day a. What is the labor productivity per labor-hour for the production of cakes at the factory?b. What is the multifactor productivity for cake production at the factory?c. If Mr. Andi wants to increase his production to 1,500 cakes per day without changingother variables, what is the productivity now?arrow_forward
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- In December, General Motors produced 6,600 customized vans at its plant in Detroit. The labor productivity at this plant is known to have been 0.10 vans per labor-hour during that month. 300 laborers were employed at the plant that month. a. How many hours did the average laborer work that month? b. If productivity can be increased to 0.11 vans per labor-hour, how many hours would the average laborer work that month? Please show work. Thank youarrow_forwardLillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes 1,200 tires per day with the following resources: D 400 hours per day @$12.00 per hour 21,000 pounds per day @ $1.00 per pound $5,250 per day $10,250 per day a) Labor productivity per labor hour for these tires = 3 tires/labor hour (round your response to two decimal places). b) Multifactor productivity for these tires= 0.0291 tires/dollar (round your response to four decimal places). c) The percent change in multifactor productivity if Fok can reduce the energy bill by $1,000 per day without cutting production or changing any other inputs = % (enter your response as a percentage rounded to two decimal places). Note: calculate the new multifactor productivity to four decimal places before calculating the percentage change. Labor: Raw Material: Energy: Capital:arrow_forwardLillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes 1,200 tires per day with the following resources: Labor: 425 hours per day @ $ 12.50 per hour Raw Material: 20,000 pounds per day @ $ 1.50 per pound Energy: $ 5,000 per day Capital: $ 10,250 per day a) Labor productivity per labor hour for these tires = enter your response here tires/labor hour (round your response to two decimal places). b) Multifactor productivity for these tires = enter your response here tires/dollar (round your response to four decimal places). c) The percent change in multifactor productivity if Fok can reduce the energy bill by $ 1,000 per day without cutting production or changing any other inputs = enter your response here % (enter your response as a percentage rounded to two decimal places).…arrow_forward
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- Management, Loose-Leaf VersionManagementISBN:9781305969308Author:Richard L. DaftPublisher:South-Western College Pub