John Lucy makes wooden boxes in which to ship motorcycles.

John and his three e

making the 120 boxes.

a)What is their productivity?

b) If they can increase the rate to 125 per day, what will be their ne
c) What will be their percentage in productivity and percentage cha

a) output 120
input 40

productivity 3

b) new productivity 3.125

c) percentage in productivity 0.125 increase

d) percentage change in productivity 4.17% increase

 ohn and his three employees invest total of 40 hours per day

what will be their new productivity?

and percentage change?
Labour 30
Materials 70
Overhead 50
sp 300

a) productivity 2 b) labour costs

2.2
percentage

costs 136.36
material costs 56.36 c) Overhead costs

percentage 19.5% percentage

16.36

45.5%

36.36

27.3%
The BBBC Company has a large order of military uniforms. Working the normal two
shifts of 40 hours each per week, the BBBC production process usually produces 2500
uniforms per week at a standard cost of 120 USD each. 70 employees work the I shift
and 30 employees - II shift. The contract price is 200 USD/uniform. Because of urgent
need, BBBC authorized to work six days, 72 hours per each shift. Production level now
is 4000 unit/week and cost of 144 USD each.

a)Did the multifactor productivity ratio increase, decrease or remain the same? If it
changed, by what percentage did it change?
b)Did the labor productivity ratio increase, decrease or remain the same? If it changed, by what percentage did it ch
c)Did weekly profits increase, decrease or remain the same?

hours
uniforms
cost

shift1
shift2

sp

a)
what percentage did it change?

40 72
2500 4000
120 144

70
30

200

old 1.67 b) old 125

new 1.39 new 111
decrease 11%
decrease 16.7%
c) old profit 200000
new profit 224000

increase 12%
 Mack’s guitar fabrication shop produces low cost, highly durable guitars for beginn
each month, only 80 percent are considered good enough to sell. The other 20 per
identified after they have completed the production process. Each guitar sells for $
works an average 160 hours per month. Labor is paid at 10USD/hour, materials cos

a)Calculate the labor and multifactor productivity ratios.

b)After some study, the operations manager Daren Funk recommends 3 options to
company’s multifactor productivity: (1) increase the sales price by 10 percent; (2)
that only 10 percent are defective, or (3) reduce labor, material, and overhead cos
Which option has the greatest impact on the multifactor productivity measure?

a) guitars 100 b) 2.29

sp 250
hours 160 2.34
labour 10
material 40 1.88
overhead 4000

labor pr 0.625

9600
multifactor pr 2.08
 able guitars for beginners. Typically, out of the 100 guitars that begin production
o sell. The other 20 percent are scrapped due to quality problems that are
. Each guitar sells for $250 and required only 10 labor hours. Each employee
SD/hour, materials cost is 40 USD/guitar, and overhead is 4000$.

ommends 3 options to improve the

rice by 10 percent; (2) improve quality so
rial, and overhead costs by 10 percent.
oductivity measure?

option 1

option 2 best option

option 3