What\'s your thought?? Labor costs of an auto repair mechanic are seldom based o

Question

What's your thought??

Labor costs of an auto repair mechanic are seldom based on actual hours worked. Instead, the amount paid a mechanic is based on an industry average of time estimated to complete a repair job. The repair shop bills the customer for the industry average amount of time at the repair center's billable cost per hour. This means a customer can pay, for example, $120 for two hours of work on a car when the actual time worked was only one hour. Many experienced mechanics can complete repair jobs faster than the industry average. The average data are compiled by engineering studies and surveys conducted in the auto repair business. Assume that you are asked to complete such a survey for a repair center. The survey calls for objective input, and many questions require detailed cost data and analysis. The mechanics and owners know you have the survey and encourage you to complete it in a way that increases the average billable hours for repair work.

Required

Address the mechanics and owners and describe the direct labor analysis you will undertake in completing this survey.

Explanation / Answer

The labour analysis survey is done in below way:

1)First collect the most common jobs performed by auto mechanics.
2)FOr each job chose some 20 mechanics at random and ask them how much time will they take to complete the job.
3)This again depends on the type of vehicle they are working on like 2 wheeler,3 wheeler,4 wheeler, large trucks, buses etc

4)FOr each category and each vehicle type collect th sample and so statistical analysis
5)Arrive at mean and standard deviation and comput 2sigma and 3 sigma to mean which the probability of completing at that time.

6)This is the base we use and also what is hourly wages paid for labpur is multiplied with it and the amount is charged to customers

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