Question Problem 17 Bookmatch George Kyparisis makes bowing

Question Problem 1.7- Bookmatch George Kyparisis makes bowing balls in his Miami plant. With recent increases in his costs, he has a newfound interest in efficiency. George is interested in determining the roductivity of his organizaton. He would like to know his organization is maintaining the manufacturing average of a 3% crease in roduci has the following data representing a month from last year and an equivalent month this year Cost Per Input Unit Now 1,000 1,000 Last Year Units Produced Labor (hours) Resin (pounds) Capital Invested ($) Energy (BTU) 300 50 10,000 3,000 275 45 11,000 2850 $10 per hour $5 per pound 1%per month 0.50 per BTU % The percent change in product y for one mon last year versus one month this year on amat actor basis with dollars as the common de your reaponoe as a percentage rounded to two decimal places) m ator en

Solution

For last year,

Multi-factor productivity = unit produced/(labor cost + resin cost + capital cost+ Energy cost)

Multi-factor productivity = 1000/(10*300 + 5*50 + 1%*10000 + .5*3000)

Multi-factor productivity = .2062 units /$

For this year,

Multi-factor productivity = unit produced/(labor cost + resin cost + capital cost+ Energy cost)

Multi-factor productivity = 1000/(10*275 + 5*45 + 1%*10000 + .5*2850)

Multi-factor productivity = .2222 units /$

% change in productivity = (.2222-2062)/.2062 = 7.76%

So, there is an improvement in productivity by 7.76%.