Your company makes common coffee mugs and you purchased new equipment to improve

Question

Your company makes common coffee mugs and you purchased new equipment to improve labor productivity.

For the last few years, your production line consisted of six workers earning $12.90 per hour making a total of 584 cups per hour. The original machines cost $198 per hour to operate.

With the new equipment, you now operate with only five workers earning $14.30 per hour. The new equipment costs $228 per hour which allows you to produce a total of 644 cups per hour.

Calculate the number of cups per worker per hour for before and after the new equipment (assuming a standard 40 hour work week). Your answer should be the change in productivity (i.e., the percentage change in cups per worker per hour). (Keep two decimal places in your answer)

Your Answer:

Explanation / Answer

Old Equipment:

Given,

Number of workers working = 6

Number of cups produced per hour = 584

Therefore, Number of cups per worker per hour for old machine = 97.33

New Equipment:

Given,

Number of workers working =5

Number of cups produced per hour = 644

Therefore, Number of cups per worker per hour for old machine = 128.8

So, the change in productivity (i.e., the percentage change in cups per worker per hour) = (128.8 – 97.33)/97.33

= 0.3233 = 32.33%

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