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    Production Assignment 1

    Uploaded by

    savisuren312
    Win Win Clothing opened four new stores across the state. Based on monthly sales volume and labor hours data provided, the Charlottesville store has the highest labor productivity. When rent and hourly wage rates are also considered, Charlottesville remains the most productive, while Blacksburg is the least productive and should be closed. For a postal center evaluating productivity across locations with different automation and worker skills, Center 3 has the highest multifactor productivity. Among students selling newspaper ads, Jennifer is the most productive based on number of ads sold per hour worked. In recommending a freezer brand for a grocery store remodeling, Case has the highest productivity measured in cubic feet of freezer space per dollar spent on purchase and operating costs over three years.

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    Production Assignment 1

    Uploaded by

    savisuren312
    8 views4 pages
    Win Win Clothing opened four new stores across the state. Based on monthly sales volume and labor hours data provided, the Charlottesville store has the highest labor productivity. When rent and hourly wage rates are also considered, Charlottesville remains the most productive, while Blacksburg is the least productive and should be closed. For a postal center evaluating productivity across locations with different automation and worker skills, Center 3 has the highest multifactor productivity. Among students selling newspaper ads, Jennifer is the most productive based on number of ads sold per hour worked. In recommending a freezer brand for a grocery store remodeling, Case has the highest productivity measured in cubic feet of freezer space per dollar spent on purchase and operating costs over three years.

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    Win Win Clothing opened four new stores across the state. Based on monthly sales volume and labor hours data provided, the Charlottesville store has the highest labor productivity. When rent and hourly wage rates are also considered, Charlottesville remains the most productive, while Blacksburg is the least productive and should be closed. For a postal center evaluating productivity across locations with different automation and worker skills, Center 3 has the highest multifactor productivity. Among students selling newspaper ads, Jennifer is the most productive based on number of ads sold per hour worked. In recommending a freezer brand for a grocery store remodeling, Case has the highest productivity measured in cubic feet of freezer space per dollar spent on purchase and operating costs over three years.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    8 views4 pages

    Production Assignment 1

    Uploaded by

    savisuren312
    Win Win Clothing opened four new stores across the state. Based on monthly sales volume and labor hours data provided, the Charlottesville store has the highest labor productivity. When rent and hourly wage rates are also considered, Charlottesville remains the most productive, while Blacksburg is the least productive and should be closed. For a postal center evaluating productivity across locations with different automation and worker skills, Center 3 has the highest multifactor productivity. Among students selling newspaper ads, Jennifer is the most productive based on number of ads sold per hour worked. In recommending a freezer brand for a grocery store remodeling, Case has the highest productivity measured in cubic feet of freezer space per dollar spent on purchase and operating costs over three years.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    Question 1

    Win Win Clothing has opened four new stores in college towns across the state. Data on monthly
    sales volume and labor hours are given below. Which store location has the highest labor
    productivity?

    Store Annandale Blacksburg Charlottesville Danville


    Sales volume $40,000 $12,000 $60,000 $25,000
    Labor hours 250 60 500 200

    Answer

    Output/Input = Sales volume/Labor hours

    Store Annandale Blacksburg Charlottesville Danville


    Sales volume $40,000 $12,000 $60,000 $25,000
    Labor hours 250 60 500 200
    Productivity $40000/250 = $12000/60 = $60000/500 = $25000/200 =
    $160 $200 $120 $125

    Question 2

    Win Win’s accountant suggests that monthly rent and hourly wage rate also be factored into the
    productivity calculations. Annandale pays the highest average wage at $5.70 an hour; Blacksburg
    pays $5.50 an hour; Charlottesville $5 and Danville $4.50. The cost to rent store space is about $1600
    a month in Annandale, $2100 in Blacksburg, $1000 a month in Charlottesville, and $800 a month in
    Danville.

    Output/Input = Output/multifactor input

    a) Which store is most productive?

    Charlottesville is the most productive

    b) Win Win is not sure it can keep all four stores open. Based on multifactor productivity, which
    store would you close?

    Based on productivity, the Blacksburg store should be closed. Blacksburg has lowest productivity
    compared to other three stores.

    Store Annandale Blacksburg Charlottesville Danville


    Sales volume $40,000 $12,000 $60,000 $25,000
    Labor hours 250 60 500 200
    Labor cost/hr $5.75 $5.50 $5.00 $4.50
    Rent $1600 $2100 $1000 $800
    Productivity $40000/( (250 x $12000/( (60 x $60000/( (500 x $25000/( (200 x
    $5.75) + 1600) = $5.50) + 2100) = $5.00) + 1000) = $4.50) + 800) =
    $13.17 $4.94 $17.14 $14.71
    Question 3

    Setapak Post Office is evaluating the productivity of its mail processing centers. The centers
    differ in the degree of automation, the type of work that can be performed, and the skill of the
    workers.

    Center 1 2 3

    Pieces processed 1,000 2,000 3,000

    Workers/hr 10 5 2

    Hourly wage rate $5.50 $10 $12

    Overhead/hr $10 $25 $50

    a) Calculate the multifactor productivity for each center.


    b) Workers in Center 1 are scheduled to receive a 10% pay raise next month. How will
    that affect productivity?
    c) A new processing machine is available for Center 3 that would increase the output to
    5000 pieces an hour at an additional overhead rate of $30 an hour. Should they install
    the new processing machine?

    Answer

    Center 1 2 3 C new

    Pieces processed 1,000 2,000 3,000 5000

    Workers/hr 10 5 2 2

    Hourly wage rate $5.50 $10 $12 $12

    Overhead/hr $10 $25 $50 $80

    Multifactor 15.38 26.67 40.54 48.08


    productivity

    a) Output/Input = Output/multifactor input


    Center 3 is the most productive
    b) With a 10% raise in center 1 , productivity goes down to 14.18 pieces per dollar spent
    10% from 55 = 5.5
    55+5.5= 60.5
    1000/(60.5+10)=14.18
    c) With new equipment in center 3, productivity goes up to 48 pieces. Install the new
    equipment.
    Question 4

    Jake and his friends sell newspaper ads for the Campus Times to supplement their income
    each year. From the data below, determine which person is the most productive.

    Jake Josh Jennifer John

    # ads sold 100 50 200 35

    # hours spent 40 15 85 10

    Answer
    Jake Josh Jennifer John

    # ads sold 100 50 200 35

    # hours spent 40 15 85 10

    Output/hr 2.50 3.33 2.35 3.50

    Output/Input = ads sold/hours spent

    Question 5

    Sherry Yee is the facilities manager for JY Groceries Store. The store is remodeling and
    wants to determine which brand of freezer to use for its frozen goods section. The freezers
    vary by size, cabinet type, accessibility, refregerant, and interliner. These variables affect both
    the purchase cost and the operating cost (e.g., energy consumption) of each freezer. Currently,
    the cost of energy per kilowatt hour (kwh) is $0.10. JY expenses capital purchases over a
    three-year period. Assume 365 days in a year. Given the cost and capacity data below,
    calculate the “productivity” (i.e., the cubic feet of freezer space per dollor) for each freezer
    alternative. Which freezer brand would you recommend to Sherry?

    Toshiba Samsung Case JLG

    Purchase cost $3,270 $4,000 $4,452 $5,450

    Daily energy consumption (kwh) 3.61 3.88 6.68 29.07

    Volume (cu ft) 25 35 49 72


    Answer

    Toshiba Samsung Case JLG

    Purchase cost $3,270 $4,000 $4,452 $5,450

    Daily energy consumption (kwh) 3.61 3.88 6.68 29.07

    Cost per kwh $0.10 $0.10 $0.10 $0.10

    Daily energy cost

    Daily energy consumption (kwh)


    x cost per kwh $0.36 $0.39 $0.67 $2.91
    Daily purchase cost

    Purchase cost/(3 x 365) 2.99 3.65 4.07 4.98

    Total cost

    Daily energy cost + Daily


    purchase cost $3.35 $4.04 $4.73 $7.88
    Volume (cu ft)

    25 35 49 72

    Productivity (cu ft/$0)

    Output/input

    Volume/total cost 7.47 8.66 10.35 10.02

    Cost/cu ft

    Total cost/volume $0.13 $0.12 $0.10 $0.10

    I would recommend Case brand to Sherry because Case’s productivity is highest compare to other
    brands.

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