VIETNAM NATIONAL UNIVERSITY – HO CHI MINH CITY- INTERNATIONAL

UNIVERSITY
PRODUCTION AND OPERATION MANAGEMENT - Lecturer: Truong Quang Duoc
Class : Tuesday afternoon

Group 7:
Lê Thu Trang – BABAWE18670 Trương Trần Diệu Linh – BABAWE18702

Lý Phương Thanh – BABAIU18187 Nguyễn Hoàng Quyên – BABAWE18660

Nguyễn Quang Hiếu – BABAWE17349 Lê Minh Thi – BABAWE18453

Nguyễn Hoàng Bảo Trân – BTARIU17025 Huỳnh Minh Trâm – BTARIU17003

Nguyễn Thị Thủy _ BABAWE18293

Homework 1
Chapter 1: Operations and productivity
Problem 1.2: Chuck Sox makes wooden boxes in which to ship motorcycles.
Chuck and his three employees invest a total of 40 hours per day making the
120 boxes.
a) What is there productivity?
units produced
productivity=
input used

In this case the units produced are 120 boxes and the input used is the labor
hours used of 40 hours
120
 Labor productivity = 40 = 3 boxes per labor-hour

b) Chuck and his employees have discussed redesigning the process to improve
efficiency. If they can increase the rate to 125 per day, what will be their new
productivity?
In this case the units produced are 125 boxes and the input used is the labor
hours used of 40 hours
 125
 New labor productivity = 40 = 3.125 boxes per labor-hour

d) What will be their percentage change in productivity?

Labor productivity has increse from 3 to 3.125
3.125−3
 The change is 3
= 0.0416 or a 4.16% increase in labor productivity

Problem 1.4: Carbondale Casting produces cast bronze valves on a 10-person

assembly line. On a recent day, 160 valves were produced during an 8-hour
shift.
a) Calculate the labor productivity of the line.
units produced
productivity=
input used

In this case the units produced are 160 valves and the input used is the labor
hours used of 80 hours
160
 Labor productivity = 80 = 2 valves per labor-hour

b) John Goodale, the manager at Carbondale, changed the layout and was able
to increase production to 180 units per 8-hour shift. What is the new labor
productivity per labor-hour?
In this case the units produced are 180 valves and the input used is the labor
hours used of 80 hours
180
 Labor productivity = 80 = 2.25 valves per labor-hour

c) What is the percentage of productivity increase?

Labor productivity has increse from 2 to 2. 25
2.25−2
 The change is 2
= 0.125 or a 12.5% increase in labor productivity
Problem 1.5: As a library or Internet assignment, find the U.S productivity rate
(increase) last year for the (a) national economy, (b) manufacturing sector, and
(c) service sector.
(a) national economy:
According to the U.S. Bureau of Labor Statistics reported

_ Nonfarm business sector labor productivity increased 2.3 percent in the second
quarter of 2019, as output increased 1.9 percent and hours worked decreased 0.4
percent.

_ Nonfarm business sector labor productivity increased 1.2 percent in the fourth
quarter of 2019, as output increased 2.4 percent and hours worked increased 1.2
percent. (All quarterly percent changes in this release are seasonally adjusted
annual rates.)
_ From the fourth quarter of 2018 to the fourth quarter of 2019, productivity
increased 1.8 percent, reflecting a 2.6-percent increase in output and a 0.8-
percent increase in hours worked.
_ The growth in productivity in 2019 accelerated to 1.7% from 1.3% in the prior
year and hit the highest level since 2010. The productivity of American workers
increased in 2019 at the fastest annual pace in nine years — but slower U.S.
economic growth and weak business investment suggest the gains might not last.

 Productivity snapped back with a 1.4% increase in the fourth quarter

after a small decline in the autumn

(b) manufacturing sector

Over the last four quarters in 2019, total manufacturing sector productivity
increased 0.2 percent, as output increased 0.4 percent and hours worked
increased 0.2 percent. Unit labor costs in the manufacturing sector increased 5.8
percent in the second quarter of 2019, and increased 4.3 percent from the same
quarter a year ago
 (c) service sector

Problem 1.8: George Kyparisis (using data from Problem 1.7) determines his
costs to be as follows:

 Labor: $10 per hour

 Resin: $5 per pound
 Capital expense: 1% per month of investment
 Energy: $.50 per BTU
Show the percent change in productivity for one month last year versus one
month this year, on a multifactor basis with dollars as the common
denominator.

LAST YEAR NOW

Units produced 1,000 1,000
 Labor (hours) 300 275
Resin (pounds) 50 45
Capital invested ($) 10,000 11,000
Energy (BTU) 3,000 2,850

output
productivity=
labor+ resin+capital +energy

Multi-factor productivity for one month last year:

1000
300× 10+50 ×5+10,000 ×0.01+3000 × 0.5
= 0.2062 units per dollar

Multi-factor productivity for one month this year:

1000
275× 10+45 × 5+11,000 ×0.01+2850 × 0.5
= 0.2217 units per dollar

Mutifactor productivity has increse from 0.2062 to 0.2217

0.2217−0.2062
 The change is 0.2062
= 0.075 or a 7.5% increase in multifactor
productivity
Problem 1.14: Lake Charles Seafood makes 500 wooden packing boxes for fresh
seafood per day, working in two 10-hour shifts. Due to increased demand, plant
managers have decided to operate three 8-hour shifts instead. The plant is now
able to produce 650 boxes per day.
a) Calculate the company’s productivity before the change in work rules and
after the change.
units produced
productivity=
input used

Before the change in work rules, the units produced are 500 boxes and the input
used is the labor hours used of 20 hours
500
 Labor productivity with the old rule = 20 = 25 boxes per labor hour
Due to the increased demand, the units produced are 650 boxes and the input
used is the labor hours used of 24 hours
650
 Labor productivity with the new rule = 24 = 27.083 boxes per labor hour

b) What is the percentage increase in productivity?

Labor productivity has increse from 25 to 27.083
27.083−25
 The change is 25
= 0.0832 or a 8.32% increase in labor
productivity
c) If production is increased to 700 boxes per day, what is the new productivity?
In this case the units produced are 700 boxes and the input used is the labor
hours used of 24 hours
700
 Labor productivity = 24 = 29.17 boxes per labor-hour