Compute multifactor productivity before and after purchase

Assignment Help Operation Management

Reference no: EM1374138

Q. A garden tools manufacturing industry recently purchased and installed few new equipment to reduce the labour hours of the jobs needed to produce the garden tools at various production units. Prior to buying the new equipment, the company used to employ 8 workers in unit that used to produce an average of 32 shovels per hour. Workers receive $12 per hour and overhead cost was $40 per hour. With the new equipment, it was possible to transfer one of the workers to another production unit, and the overhead cost increased by $10 per hour, while output increased by 8 shovels per hour.

Compute the following:

i. Compute unit production cost before and after purchasing the new equipment.

ii. Compute the multifactor productivity before and after purchasing the new equipment. Use labour cost and overhead cost to derive multifactor productivity.

iii. Compute and comment on the change of labour productivity and production improvement before and after purchasing the new equipment.

Comment on these changes in productivity according to the 2 measures (before and after purchasing the new equipment). Is it worth to buy new equipment considering the productivity improvement and investment.

Reference no: EM1374138

Questions Cloud

Define the sociological reasons that gender : Define the sociological reasons that gender, race and age discernment occur in American society. Describe whether you think these forces will diminish or developed more prevalent in the near future.

Describe the opportunity set : Describing the opportunity set, notice there is a portfolio that has the lowest standard deviation. This is the minimum variance portfolio. Evaluate what are the portfolio weights, expected return, and standard deviation of this portfolio?

Standard corporations utilize to evaluate their performance : One standard corporations utilize to evaluate their performance against their competitors is the set of rankings developed by Fortune magazine

How could the foreign competitors profitably sell a product : Evaluate how could the foreign competitors profitably sell a similar product for less than manufacturing costs to Houston Electronic and what advice do you have for the president concerning the HE Versatile CVD?

Compute multifactor productivity before and after purchase : Compute the multifactor productivity before and after purchasing the new equipment. Use labour cost and overhead cost to derive multifactor productivity.

Violation of the law of demand : If you increase the vakue of your goods but sell more units is this a violation of the law of demand and how could input suppliers ever lower your profits?

Deliberate how ignorance of stereotypes about certain groups : Deliberate how ignorance of stereotypes about certain groups may influence marketing efforts targeted to a population

Illustrate what is smallest time for moving all four people : If 2 people are in the canoe, the slower person dictates the crossing time. The objective is for all four people to be on the other side of the river in the shortest time possible. Illustrate what is the smallest time for moving all four people to ..

Describe the concept of gaunxi : Describe the concept of gaunxi and Why is it so significant to businesses operating in china and How did McDonald's lack of guanxi increase its cost of doing business in china?

User Account

All Pages