Practice Problems: Chapter 1, Operations and Productivity

Problem 1: Mance Fraily, the Production Manager at Ralts Mills, can currently expect his operation to produce 1000 square yards of fabric for each ton of raw cotton. Each ton of raw cotton requires labor hours to process. !e belie"es that he can buy a better quality raw cotton, which will enable hi# to produce 1$00 square yards per ton of raw cotton with the sa#e labor hours. %hat will be the i#pact on producti"ity &#easured in square yards per labor'hour( if he purchases the higher quality raw cotton) Solution: *abor Producti"ity + ,nits Produced &output( *abor hours used -utput + 1000 sq yards *abor + hours

.urrent &/(0 *abor Producti"ity + 1000 + $00 sq yards1hr

2ew &3(0 *abor Producti"ity + 1$00 + $40 sq yards1hr

PER.E25 .!/26E 7 .hange + 3 ' / / / + $00 sq yards1hr 3 + $40 sq yards1hr

Producti"ity change &i#pro"e#ent( + & $40 ' $00 ( 1 $00 + .$ or $07 i#pro"e#ent in producti"ity

Problem 2:
1

8oanna French is currently wor9ing a total of 1$ hours per day to produce $40 dolls. :he thin9s that by changing the paint used for the facial features and fingernails that she can increase her rate to ;<0 dolls per day. 5otal #aterial cost for each doll is approxi#ately =;. 0> she has to in"est =$0 in the necessary supplies &expendables( per day> energy costs are assu#ed to be only =4.00 per day> and she thin9s she should be #a9ing =10 per hour for her ti#e. ?iewing this fro# a total &#ultifactor( producti"ity perspecti"e, what is her producti"ity at present and with the new paint) &/:,MP5@-20 P/@25 .-:5: 5!E :/ME /M-,25( Solution: Producti"ity + -utput @nput -utput + A of dolls @nput + = to produce .urrent0 Costs Material :upplies Energy %ages =;. 0 per doll =$0 per day =4 per day =10 per hour $40 + DC4 2ew0 Costs Material :upplies Energy %ages =;. 0 per doll =$0 per day =4 per day =10 per hour ;<0 + 1,404 1$ B =10 + .$< ;<0 B =;. 0 + =1,$<0 =$0 = 4 = 1$0 =1,404 Producti"ity + .$4 1$ B =10 + $40 B =;. 0 + =C40 =$0 = 4 =1$0 =DC4 Producti"ity +