Assignment it to be turned in Monday at the start of class in hardcopy. You may
ID: 407345 • Letter: A
Question
Assignment it to be turned in Monday at the start of class in hardcopy. You may do the assignment by yourself or in teams of two. Make sure you show oil work and oil names are on the paper you turn In. You manage a company that installs decks Currently, your team Installs 290 square feet of deck per day. You have teams of four workers per shift, and your teams work two eight hour shifts per day. Your equipment capital costs are $5O per day Your material use 140 linear feet of decking per day and 37 pounds of other raw material per day Your costs are $15 per laborjjpur, $3.50 per linear foot of decking, and $1.15 per pound of other raw material. What is your current multifactor productivity? You hire a USC Upstate operations management student named Emity to improve productivity. Emily works with your workers to brainstorm and develop three possible approaches The first approach is to reduce material costs. She found a supplier who will charge $3.00 per linear foot of decking and $1.00 per pound of other raw material. The second approach Is to Improve work methods. In this approach, it is estimated that the team will install 355 square feet of deck per day. The material use is estimated to be 130 linear feet of decking and 32 pounds of other raw material. The third approach is to automate some parts of the installation process. This would increase capital costs for new equipment and reduce workers used. In this approach, it is estimated that the team will install 325 square feet of deck per day. The team can be reduced by one person per shift. The capital costs will increase to $150 per day. What Is your choice of approach to improving productivity? By what percentage was productivity improved with your choice of approach?Explanation / Answer
Question 1:
Current Installation: 290 sqft of deck a day
No. of workers per shift = 4
No. of shifts = 2 eight hour shifts
So, basically 8 people are working for 16 hours a day to install 290 sqft of deck a day.
Costs per day:
Cost per labor: $15 per labor hour
Total Cost per day for labor: (8*15*16) = $1920.
Cost per linear foot of decking: $3.50
Total requirement of decking per day= 140 linear feet
Total Cost of decking per day= (140*3.50) = $490
Cost of other raw material= $1.15 per pound
Total pounds required per day= 37
Total Cost of other raw material= (37*1.15) = $42.55
Hence, Total Costs per day = ( 1920+490+42.55) = $2452.55
Question 2:
Approach 1:
If approach 1 is considered:
Cost per linear foot of decking: $3.00
And Raw material Cost will be : $1.00 per pound
Hence, total cost would be (1920+ (140*3)+(37*1)) = $2377
Approach 2:
If approach 2 is considered:
Team will install 355 sqft deck a day
Hence, material used will be 130 linear foot and 32 pounds of Raw material.
Hence, the total cost would be ( 1920+(130*3.50)+(32*1.15)) = $2411.8
Approach 3:
Team will install 325 sqft deck a day
One person per shift is reduced. Hence its 3 members per shift and 6 members for two shifts.
Capital Cost would increase to $150 a day.
Hence, the total cost would be ( (6*15*16)+(140*3.50)+(37*1.15)+150) = $2122.55
Hence, It is clearly seen that Approach 3 is the best in increasing the productivity.
Question 3:
Increase in productivity (325-290) = 35
Percentage increase (35/290)= 12.06%
By the third approach, productivity is increased by 12%
Costs have decreased by (2452.55-2122.55) $330 dollars a day
Number of workers have reduced per shift and advanced machinery is installed.
Hence, approach 3 is the best.
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