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Productivity Numericals

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Falisha Arshad
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94 views9 pages

Productivity Numericals

Uploaded by

Falisha Arshad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Productivity

Productivity = Output / Input

Process Improvement or Elimination of waste

Output - Number of Units & its selling


Input – Number of Labour, their hours, wage, raw meterial with prices,
Over heads, capital etc.
Q
Compute the multifactor productivity
measure for an eight-hour day in
which the usable output was 300
units, produced by three workers
who used 600 pounds of materials.
Workers have an hourly wage of $20,
and material cost is $1 per pound.
Overhead is 1.5 times labor cost.
Output = 300 units ( no cost is given)

Inputs: 8 hrs, 3 workers, $20 : 3 x 8 x 20 = $480


Raw material : 600 lb , $1 = 600 x 1 = $600
O/H : 1.5 x $480 = $720
Grand Total = $1800

MFP = 300 / 1800 = 0.167 UNITS/$


Calculate the productivity for the following operations. Three employees processed 600
insurance policies last week. They 8 hours per day, 5 days per week.

Solution:
a) Labor productivity = Policies processed
Employee, hours
= 600 policies/ 3x(40)
= 5 policies per hours
Week Output Workers Materials
Q (units) (lbs)
1 300 6 45
2 338 7 46
3 322 7 45

Hours per week – 40 /labour


Hourly labour wage -$12
Week 1
Overhead – 1.5 times the weekly labour cost
output : 300 x 140 = $42000
Material cost - $6/lb
Sales price - $140/unit
Inputs
Labour :40 x 12 x 6 = $2880
Find MULTI-FACTOR PRODUCTIVITY
O/H: 1.5 x 2880 = $4320
Material: 45 x $6 x 6 = $270
Answers
Total = $7470
WEEK 1 , $5.62
WEEK2, $5.45
MFP= 42000 / 7470 = $5.62
WEEK3, $5.19
Q) A company that processes fruits and
vegetables is able to produce 400 cases of
canned peaches in one half hour with four
workers. What is the labor productivity?

Q) A wrapping paper company produced


2,000 rolls of paper one day. Standard price is
$ 1/roll. Labor cost was $ 160, material cost
was $ 50, and overhead was $ 320. Determine
the multifactor productivity.
Solution:
Labor productivity = Quality Produced / Labors
Hours
= 400 cases (4 workers x 1/2 hours / workers)
= 200 cases per labor hour

Solution:
Multifactor productivity =
Quality produced at standard price/(Labor cost
+ Material cost + Overhead)
= 2,000 rolls x $ 1/ ($160+ $ 50 + $320)
= 3.77 rolls output per dollars
Question
Productivity can be measured in a variety of ways,
such as by
labor, capital, energy, material usage, and so on. At
Modern
Lumber, Inc., Art Binley, president and producer of
apple
crates sold to growers, has been able, with his current
equipment, to produce 240 crates per 100 logs. He
currently purchases 100 logs per day, and each log
requires 3 labor-hours to process. He believes that
he can hire a professional buyer who can buy a
better-quality log at the same cost. If this is the case,
he can increase his production to 260 crates per 100
logs. His labor-hours will increase by 8 hours per day.
What will be the impact on productivity (measured in
crates per labor-hour) if the buyer is hired?

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