Assignment # 1

Topic: Operations and Productivity

Q1. George Kyparisis (using data from Problem 1.5) determines his costs to be as follows:
◆ Labor: $10 per hour
◆ Resin: $5 per pound
◆ Capital expense: 1% per month of investment
◆ Energy: $0.50 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.

Q2. 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.
b) What is the percentage increase in productivity?
c) If production is increased to 700 boxes per day, what is the new productivity?

Q3. As part of a study for the Department of Labor Statistics, you are assigned the task of evaluating the
improvement in productivity of small businesses. Data for one of the small businesses you are to
evaluate are shown at right. The data are the monthly average of last year and the monthly average this
year. Determine the multifactor productivity with dollars as the common denominator for:
a) Last year.
b) This year.
c) Then determine the percent change in productivity for the monthly average last year versus the
monthly average this year on a multifactor basis.
◆ Labor: $8 per hour
◆ Capital: 0.83% per month of investment
◆ Energy: $0.60 per BTU
Q4.