Explain capital investment, Operation Management

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Sawyer's a local bakery, is worried about increased costs- particularly energy. Last's records can provide a fairly good estimate of the parameters for this year. Judy Sawyer, the owner, does not believe things have changed much, but she did invest an additional $3000 for modifications to the bakery's ovens to make them more energy efficient. The modifications were supposed to make the ovens at least 15% more efficient. Sawyer has asked you to check the energy savings of the new ovens and also to look over other measures of the baker's productivity to see if the modifications were beneficial. You have the following data to work with: last year Now production (dozen) 1500 1500 labour (hours) 300 325 Capital investment ($) 15000 18000 energy (btu) 3000 2750


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