1. The standard time for completing a particular activity is four minutes and fi

Question

1. The standard time for completing a particular activity is four minutes and fifteen seconds.

a) Suppose an experienced employee completes an average of 16 activities per hour. What is the efficiency of this experienced employee?

b) Suppose a new employee is hired who has an efficiency of 75%. How long (in minutes and seconds) does it take the new employee on average to complete the activity?

c) Suppose the new employee (from part b) is paid $600 each week for 40 hours of work. Given the new employee has an efficiency of 75% (as in part b), how much revenue must each activity generate to cover the cost of the new employee?

Explanation / Answer

a. Standard time to complete a particular activity = 4 minutes & 15 seconds (100% efficiency)

Time taken by an experienced employee to complete an activity = 60 / 16 = 3 min 45 sec

Efficiency of experienced employee = 4.25 / 3.75 x 100 = 113.33%

b. Time taken by the new employee to complete the task with 75 % efficiency:

255 x 100 / 75 = 340 seconds or 5 minutes and 40 seconds.

c. Number of activity the new employee will complete in 40 hours = 40x60x60 / (5x60)+40

Number of activity new employee will complete = 423.52

Revenue that has to be generated to cover the cost = 600 / 423.52 = $1.41.

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