1 .6 Eric Johnson makes billiard balls in his New England plant. With recent inc
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Question
1.6 Eric Johnson makes billiard balls in his New England
plant. With recent increases in his costs, he has a newfound interest
in efficiency. Eric is interested in determining the productivity of his
organization. He would like to know if his organization is maintaining
the manufacturing average of 3% increase in productivity. He
has the following data representing a month from last year and an
equivalent month this year:
Show the productivity percentage change for each category and
then determine the improvement for labor-hours, the typical standard
for comparison. PX
%u2022 %u2022 1.7 Eric Johnson (using data from Problem 1.6) determines
his costs to be as follows:
%u2022 Labor: $10 per hour
%u2022 Resin: $5 per pound
%u2022 Capital expense: 1% per month of investment
%u2022 Energy: $.50 per BTU.
Show the percent change in productivity for one month last year
versus one month this year, on a multifactor basis with dollars as the
common denominator. PX
Last Year Now
Units produced 1,000 1,000
Labor (hours) 300 275
Resin (pounds) 50 45
Capital invested ($) 10,000 11,000
Energy (BTU) 3,000 2,850
*Note: PXmeans the problem may be solved with POM for Windows
and/or Excel OM.
Explanation / Answer
An
Eric Johnson (using data from Problem 1.6) determines his costs to be as follows:
%u2022 Labor: $10 per hour = 300 -275
%u2022 Resin: $5 per pound = 50 -45
%u2022 Capital expense: 1% per month of investment = $10,000 - $11,000
%u2022 Energy: $.50 per BTU = 3,000, 2.850
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Show the percent change in productivity for one month last year versus one month this year, on a multifactor basis with dollars as the common denominator.
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