Homework: Homework 1 Save Score: 0 of 5 pts 11 of 21 (19 complete) w Score: 67.5
ID: 415450 • Letter: H
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Homework: Homework 1 Save Score: 0 of 5 pts 11 of 21 (19 complete) w Score: 67.5%, 20.25 of 30 pts X) Problem 1.13 Question Help * Charles Lackey operates a bakery in Idaho Falls, Idaho. Because of its excellent product and exellent location, demand has increased by 35% in the last year. On far too many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be baked at one time. This new process will require that the ovens be loaded by hand, requiring additional manpower. This is the only thing to be changed. The bakery currently makes 1,600 loaves per month. The pay will be $8 per hour for employees and each employee works 160 hours per month Charles Lackey can also improve the yield by purchasing a new blender. The new blender will mean an increase in his investment. This new blender will mean an increase in his costs of $150 per month, but he will achieve the same new output (an increase to 2,160.00) as the change in labor hours. a) Current productivity for 640 work hours 313 loaves/dollar (round your response to three decimal places) If Charles chooses to increase the number of work hours to 864 in order to employ the new oven loading technique, then the productivity is - 0.313 loaves/dollar (round your response to three decimal places) b) If Charles instead chooses to purchase a new blender (while holding labor constant at 640 hours at $8 per hour), then the productivity is-loaves/dollar (round your response to three dedimal places) roductivity- loaves/dollar (round your response to three decimal Enter your answer in the answer box and then click Check AnswerExplanation / Answer
a. Current productivity for 640 workers = 1600 loaves/(640 work hours*$8 per hour) = 1600/5120 = 0.313 loaves/dollar
If work hours is increased to 864 then output = 2160 loaves (1600*1.35). New productivity = 2160/(864*8) = 2160/6912 = 0.313 loaves/dollar
b. If new blender is purchased then output = 1600*1.35 = 2160. Cost of labor = 640 work hours*$8 per hour = $5120. Increased monthly cost due to new blender = $150. Thus total cost = 5120+150 = $5270
Productivity = 2160/5270 = 0.410 loaves/dollar.
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