Aztec Furnishings makes hand-crafted furniture for sale in its retail stores. Th

Question

Aztec Furnishings makes hand-crafted furniture for sale in its retail stores. The furniture maker has recently installed a new assembly process, including a new sander and polisher. With this new system, production has increased to 1999 pieces of furniture per month from the previous 1116 pieces of furniture per month. The percentage of defective items produced has dropped from 10.8% to 0.5%.

(1)How much did productivity improve? %

(2)How much of the improvement in productivity is due to improvements in quality? %

Explanation / Answer

(1)

Number of good (non-defective) items produced before = 1116*(1-10.8%) = 995.5

Number of good (non-defective) items produced now = 1999*(1-0.5%) = 1989

Productivity improvement = (1989 - 995.5)/995.5 = 99.8 %

(2) Productivity improvement due to improvements in quality = 1999*(10.8%-0.5%)/(1989-995.5)

= 20.7 %

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