Reference no: EM132394769

Sabrina and her friend, Louis, are college students and have started a part-time business. They focus on finding trendy products and to sell while the products are a fad and then move on to finding the next product. They are currently selling selfie sticks that people use to attach their phone to and extend out to take a photo of themselves. Sabrina orders that parts from Korea and she Louis must unpack the parts, assemble the sticks, and then repack in a more marketable box. Since Sabrina and Louis are full time students, they can dedicate 15 hours each to the assembly and packaging process per week. On average, they can assemble and box 400 selfie sticks per week from their combined effort.

A) What is the productivity per labour hour?

B) Louis learns about efficiency in his operations course and organizes the assembly and packaging process differently. Now he and Sabrina can assemble 437 selfie sticks per week without increasing their hours. What is their percentage change in productivity per labour hour?

C) Sabrina wants to determine what the productivity would be if this was a business that she and Louis started after graduation and moved out of their student rental apartment with employees. She thinks rent per month for small industrial space would be $450 per month. She estimates utilities for the space would cost $300 per month. She and Louis would work on developing the business and hire 1 employee to work 30 hours per week with a wage of $11.50 per hour. Sabrina has an arrangement with a Korean exporter to purchase the unassembled sticks for $0.50 and the packaging costs $0.25 for each stick. Using 4 weeks per month, what would the productivity be for Sabrina and Louis' new business arrangement assuming they are selling just the selfie sticks and the one employee produced 437 sticks per week?