Change in multifactor productivity between the two systems

Assignment Help Operation Management

Reference no: EM131027380

Woodland Furniture is a small manufacturer of kitchen chairs with 5 workers. The cost of labor is $15 per hour and workers work 40 hours in a week. The overhead cost is assumed to be 1.2 times the weekly total labor cost. Material cost is $10 per chair. Last year, on average, Woodland produced 250 chairs per week, and of the items produced 16% were defective. The nondefective chairs were sold for $100 each and the defective chairs were sold for an average of $40 per chair. Woodland recently installed a new assembly process, including a new sander and polisher. With this new system, production has increased to 280 chairs per week and the defective rate decreased to 10%. Assume the same sale prices for defective and non-defective chairs. a) Calculate the multifactor productivity for the old and new production systems. b) Compute the percentage change in multifactor productivity between the two systems.

Reference no: EM131027380

Questions Cloud

Discuss some of the personal traits : Discuss some of the personal traits that you believe would be important for business leaders today. Are they more important in some situations than in others? What skills would a leader need to have to be effective managing in a virtual environment?

Competing on analytics : Refer to "Competing on Analytics." How can a company become and prosper as an analytics competitor? What are the sources of strength for an analytics competitor? How has this article influenced your views about quantitative business modeling and its ..

Units must be produced-sold per year in order to break even : Richard Winchester, owner of Winchester Products, is considering introducing a new product which will require $45,000 in fixed costs per year. Winchester estimates the variable costs of each unit produced at $13. If the unit selling price is set at $..

What are external opportunities available to the sugar bowl : What are the barriers to entries to enter a similar business like the sugar bowl? What are the external opportunities available to the sugar bowl in their local market? the analysis is for a five mile radius from the sugar bowl. is there a collage ne..

Change in multifactor productivity between the two systems : Woodland Furniture is a small manufacturer of kitchen chairs with 5 workers. The cost of labor is $15 per hour and workers work 40 hours in a week. The overhead cost is assumed to be 1.2 times the weekly total labor cost. Calculate the multifactor p..

About the advertising plan : Explain the creative media strategy that will be used for the plan for television, direct marketing, magazine, newspaper, and/or other media. Choose at least two media. Explain the creative strategy that will be used for the plan for social media, in..

Address the potential contact point failures : Justify recommendations to prevent or address the potential contact point failures and enhance service delivery in your organization. Be sure to consider how customers will benefit by your recommendations. Defend a statement positioning the brand aro..

Many states now face budget cutbacks : Many states now face budget cutbacks. Many programs now are being cut across the board. How do you think those that depend most on state programs will be adversely affected?

When using rural streets over-sized truck alternate routes : When using rural streets as over-sized truck alternate routes, what are 4 options that can be done in order to have less disturbance for the communities as possible?

User Account

All Pages