Output
Week Workers Material (lbs) Other given
(units)
1 30,000 6 410 HOUR PER WEEK 40
2 33,600 7 480 HOURLY WAGE $ 15.00
3 32,200 7 470 MATERIAL COST $ 6.00
4 35,400 8 490 OVERHEAD 1.50
Material Overhead
Week Output Labor Cost Total Cost
Cost Cost
1 30,000 3,600 2,460 5,400 11,460
2 33,600 4,200 2,880 6,300 13,380
3 32,200 4,200 2,820 6,300 13,320
4 35,400 4,800 2,940 7,200 14,940
How much is the increase or decrease in productivity from week 3 to 4? = -2%
-0.05
-2%
Sample PROBLEM 2
A company that makes shopping carts for supermarket and other stores recently purchased some new equipme
labor content of the jobs needed to produce the shopping cart. Prior to buying the new equipment, the compan
who produced an average of 90 carts per hour. Workers receive $20 per hour, and machine cost was $40 per h
equipment, it was possible to transfer one of the workers to another department, and equipment cost increase
while output increased by 10 carts per hour.
A. Compute productivity under each system. Use carts per worker per hour as the measure of labor productivity
Manual system 12.86
System with new equipment 16.67
B. Compute the multifactor productivity under each system. Use carts per dollar cost (labor + equipment) as the
Manual system 0.50
System with new equipment 0.59
C. What is the productivity change for A and B? A
B
Sample Problem 3
An electronics company makes communication devices for military contracts. The company just completed two
contract was for 2,300 devices, and took 25 workers two weeks (40 hours per week) to complete. The army con
devices that were produced by 35 workers in three weeks.
A. Compute the productivity per worker per week Compute and productivity per labo
Navy contract 46.00
Army contract 52.38
B. Which contract were the workers more productive? Army Contract
Productivity
2.62
2.51
2.42
2.37
purchased some new equipment that reduces the
e new equipment, the company used 7 workers,
d machine cost was $40 per hour. With the new
, and equipment cost increased by $10 per hour
measure of labor productivity.
=90 carts / 7 workers
=100 (90 carts + 10 carts) /6 (7workers - 1worker)
ost (labor + equipment) as the meassure.
=90 carts/((7*$20)+ $40)
=100/((6 workers * $20)+50 ($40 + $10)
0.30 0R 30%
0.18 0R 18%
company just completed two contracts. The navy
ek) to complete. The army contract was for 5,500
pute and productivity per labor hour
1.15
1.31
Contract
