George Kyparisis makes bowing balls in his Miami plant. With recent increases in

Question

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 deter ring the productity of his o nization He would like to know if his organization is maintang te manufacturing average of a 3%n ease n product has the following data representing a month from last year and an equivalent month this year ity. He Cost Per Input Unit Last Year 1,000 280 50 9,000 ,000 Now 1,000 255 45 10,000 Labor (hours) Resin (pounds) Capital Invested ($) Energy (BTU) $12 per hour $5 per pound 1%per month 2850 050 per BTU 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%(enter your response as a percentage rounded to two decimal places)

Explanation / Answer

Last year Now Labor cost ($12 per hour) = $        3,360 $        3,060 Resin cost ($5 per pound) = $            250 $            225 Capital cost (1% of investment) = $              90 $            100 Energy ($0.50 per BTU) = $        1,500 $        1,425 Total productivity (a) = $        5,200 $        4,810 Production (b) = 1000 1000 Productivity of units per $ (b) / (a) =     0.192308     0.207900 Change in productivity = (Now - Last year) / Last year = (0.207900 - 0.192308) /0.192308 = 8.11% Workings: Last year Now Production = 1000 1000 Labor cost ($12 per hour) = 280 X $12 255 X $12 $        3,360 $        3,060 Resin cost ($5 per pound) = 50 X $5 45 X $5 $            250 $            225 Capital cost (1% of investment) = $9,000 X 1% $10,000 X 1% $              90 $            100 Energy ($0.50 per BTU) = 3,000 X $0.50 2,850 X $0.50 $        1,500 $        1,425

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