Operations and Production Management

MGMT 405 Operations and Production Management
Answer set 2

(Reference chapter 2 – William J. Stevenson-2007, ninth edition)
Problems and Solutions
1. Suppose that a company produced 300 standard bookcases last week using eight workers and produced 240 standard bookcases this week using six workers. In which was productivity higher? Explain.
Ans: Productivitylast week = standard bookcases produced as output / labor= 300/8= 37.8 sbc/worker
Productivity this week = standard bookcases produced as output / labor= 240/6= 40 sbc/worker
The ouput of this week shows that it has higher productivity than last week. This answer can be improved.
2. The manager of a crew that installs carpeting has tracked the crew’s output over the past several weeks, obtaining these figures.
Week
Crew size
Yards Installed
1
4
960
2
3
702
3
4
968
4
2
500
5
3
698
6
2
500
(a) Compute the labor productivity for each of the weeks.
(b) On the basis of your calculation, what can you conclude about crew size and productivity?

Ans:
(a) Productivity= Yards of carpet installed/ crew size=960/4= 240 yards/number of crew.
Week
Crew size
Yards Installed
Labor productivity
1
4
960
240
2
3
702
234
3
4
968
242
4
2
500
250
5
3
698
232
6
2
500
250

(b) Probably even-sized crews are better than odd-sizes and a crew of 2 seems to work best amongst the others.
2. (a) Compute the multi-factor productivity measure for each of the weeks shown. (b) What do the productivity figures suggest? Assume 40 hour weeks and an hourly wage of $12. Overhead is 1.5 times weekly labor cost. Material cost is $ 6 per pound.

Week
Output (units)
Workers
Materials (lbs)
1
30,000
6
450
2
33,600
7
470
3
32,200
7
460
4
35,400
8
480
Ans:
(a)

Week
Output (units)
Worker cost
12*40
Overhead cost

Materials cost
Total cost
MFP
1
30,000
2880
4320
2700
9900
3.03
2
33,600
3360
5040
2820
11220
2.99
3