On a daily basics, rebecca works 10 hrs to make baskets to sell to stores . It c

Question

On a daily basics, rebecca works 10 hrs to make baskets to sell to stores . It cost $2.00 to make each basket and she invest $18 per day on for supplies. Her energy cost is $3.00 per day; and she makes $8 per hour for her working. As of now, she makes 205 baskets daily. Rebecca believes if she get things right she can produce 255 baskets per day
1. What is Rebecca’s daily labor productivity at present, with the new process and percent change in productivity
Looking at (multifactor) productivity perspective, what is Rebecca’s daily productivity at present, with the new process and the percent change in total productivity?
If rebecca decides the change will only take place if there 20% increase in daily productivity
Using labor productivities, should the new system be used
Using total productivities, should the new system be used
How many baskets should be made a day to meet 20% productivity increase

On a daily basics, rebecca works 10 hrs to make baskets to sell to stores . It cost $2.00 to make each basket and she invest $18 per day on for supplies. Her energy cost is $3.00 per day; and she makes $8 per hour for her working. As of now, she makes 205 baskets daily. Rebecca believes if she get things right she can produce 255 baskets per day
1. What is Rebecca’s daily labor productivity at present, with the new process and percent change in productivity
Looking at (multifactor) productivity perspective, what is Rebecca’s daily productivity at present, with the new process and the percent change in total productivity?
If rebecca decides the change will only take place if there 20% increase in daily productivity
Using labor productivities, should the new system be used
Using total productivities, should the new system be used
How many baskets should be made a day to meet 20% productivity increase

On a daily basics, rebecca works 10 hrs to make baskets to sell to stores . It cost $2.00 to make each basket and she invest $18 per day on for supplies. Her energy cost is $3.00 per day; and she makes $8 per hour for her working. As of now, she makes 205 baskets daily. Rebecca believes if she get things right she can produce 255 baskets per day
1. What is Rebecca’s daily labor productivity at present, with the new process and percent change in productivity
Looking at (multifactor) productivity perspective, what is Rebecca’s daily productivity at present, with the new process and the percent change in total productivity?
If rebecca decides the change will only take place if there 20% increase in daily productivity
Using labor productivities, should the new system be used
Using total productivities, should the new system be used
How many baskets should be made a day to meet 20% productivity increase

Explanation / Answer

1) Labor productivity = Output/Input, where input is labor hours

Rebecca's daily labor productivity at present = 205 baskets / 10 hours = 20.5 baskets per hour

Rebecca's daily labor productivity with new process = 255 baskets / 10 hours = 25.5 baskets per hour

Percent change in labor productivity = (25.5-20.5)/20.5 = 24.4 %

2) Multifactor(total) productivity = Output/Input, where Input is total cost

Rebecca's daily total productivity at present = 205 baskets / (10 hours * $ 8 per hour + 205 * $ 2 per basket + $ 18 per day for supplies + $ 3 energy cost) = 205/(10*8+205*2+18+3) = 0.4012 baskets per $  

Rebecca's daily total productivity with new process = = 255/(10*8+255*2+18+3) = 0.4173 baskets per $

Percent change in labor productivity = (0.4173-0.4012)/0.4012 = 4.01 %

3) Labor productivity improvement is 24.4% , which is more than 20% . Therefore new system should be used

4) Total productivity improvement is only 4.01%, which is way less than 20%. Therefore new system should not be used.

5) For 20% improvement in total productivity, target total productivity = 0.4012*(1+20%) = 0.4814

Number of baskets (x) to make to meet 20% productivity increase should be such that  

=x/(10*8+x*2+18+3) = 0.4814

or, x = 1308

Therefore, she needs to make at least 1308 baskets to achieve 20% improvement in total productivity

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