George Kyparisis makes bowling balls in his Miami plant. With recent increases i
ID: 333019 • Letter: G
Question
George Kyparisis makes bowling balls in his Miami plant. With recent increases in his? costs, he has a newfound interest in efficiency. George is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of a? 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this? year:
George Kyparisis makes bowling balls in his Miami plant. With recent increases in his costs, he has a newfound interest in efficiency. George is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of a 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this year: Last Year 1,200 300 50 Now 1,200 275 45 Cost Per Input Unit Units Produced Labor (hours) Resin (pounds) Capital Invested ($) Energy (BTU) $12 per hour $6 per pound 1% per month $0.50 per BTU 10,000 11,000 2,750 2,900 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- your response as a percentage rounded to two decimal places) % (enterExplanation / Answer
Details about last year :
Total labour cost = $12 / hour x 300 = $ 3600
Total resin cost = $ 6/ Pound x 50 = $300
Capital cost = 1% of $10,000 = $1,000
Energy = $0.5 per BTU x 2900 = $1450
Total cost = Sum of all above costs = $3600 + $300 + $1000 + $1450 = $6350
Multifactor productivity = Units produced / Total cost = 1200 / 6350 = 0.1889 units per $
Details about this year :
Total labour cost = $12 / hour x 275 = $3300
Total resin cost = $ 6/ Pound x 45 = $270
Capital cost = 1% of $10,000 = $1,000
Energy = $0.5 per BTU x 2750 = $1375
Total cost = Sum of all above costs = $3300 + $270 + $1000 + $1375 = $5945
Multifactor productivity = Units produced / Total cost = 1200 / 5945 = 0.2018 units per $
Percentage change in productivity
= ( Multifactor productivity this year – Multifactor productivity last year) / Multifactor productivity last year x 100
= ( 0.2018 – 0.1889 )/ 0.1889 x 100
= 0.0129/0.1889 x 100
= 6.83% ( rounded to 2 decimal places )
PERCENTAGE CHANGE IN PRODUCTIVITY = 6.83 %
PERCENTAGE CHANGE IN PRODUCTIVITY = 6.83 %
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