Operations Management: Processes and Supply Chains 13th global edition by Lee J. Krajewski Solution

Week 2 = $14,842/$50 = 296.84
Week 3 = $10,603/$50 = 212.06
Week 4 = $9,526/$50 = 190.52
Productivity ratio:
Labor Productivity
Output
Input

Week 1 = Labor Productivity
Output 1124
4.4130/hour
Input 254.7 hours
  
Week 2 = Labor Productivity
Output 1310
4.413/hour
Input 296.84 hours
  
Week 3 = Labor Productivity
Output 1092
5.1495/hour
Input 212.06 hours
  
Week 4 = Labor Productivity
Output 981
5.1491/hour
Input 190.52 hours
  
5.1491 4.4130
100% 16.68%
4.4130

 
Improved 16.68%
Using Operations to Create Value   CHAPTER 1 
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5.  Alyssa’s Custom Cakes
a.
5 Birthday cakes x $50 per cake = $250
2 Wedding cakes x $150 per cake = $300
3 Specialty cakes x $100 per cake = $300
Total monthly revenue = $850
Multifactor productivity ratio = output/input
1.25 = $850/x
Solve for x = $850/1.25 = $680
Total costs = $680
Average cost per cake = $680/10 = $68/cake
b. Labor productivity
Birthday cake = $50/ 1.5 hours = $33.30/hour
Wedding Cake = $150/ 4 hours = $37.50/hour
Specialty Cake = $100/1 hours = $100/hour
c. Based on labor productivity, Alyssa should try to sell specialty cakes the most.
d. Yes, Alyssa should stop selling birthday cakes. Based on answer a, she loses
$68 - $50 = $18 every time she sells a birthday cake.
6.  Big Black Bird Company
The Big Black Bird Company problem is based on a product made by Raven
Industries. None of the numbers are representative of actual costs or volume.
a. Multifactor Productivity
Original Situation:
Value of output:  2500 000 uniforms $200   $500,
Value of input:  2500 000 uniforms $120   $300,
Productivity ratio:
Productivity    
Ouput
Input
$500,
$300,
.
000
000
167
Overtime Situation:
Value of output:  4000 000 uniforms $200   $800,
Value of input:  4000 000 uniforms $144   $576,
Productivity ratio:
Productivity    
Ouput
Input
$800,
$576,
.
000
000
139
Productivity decreases by:
1.67 1.39
100% 16.77%
1.67

 
b. Labor Productivity
Original Situation:
Value of output (from part a) is: $500,000
Labor-hours of input:  70 40 30 40 4000         hours hours hours
Using Operations to Create Value   CHAPTER 1 
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Labor productivity    $500, $125 000 4000 hours hour
Overtime Situation:
Value of output (from part a) is: $800,000
Labor-hours of input:  7 0
7 2 3 0 7 2 7 2 0 0    
   
h o u r s h o u r s h o u r s
Labor productivity =$800,000 / 7200 hours = $111.11/hours
Labor productivity decreases by:
(125/111.11) / 125 x 100% = 11.1%
c. Gross profits
Original Situation:  $500, $300, $200, 000 000 000  
Overtime Situation:  $800, $576, $224, 000 000 000  
Weekly profits increased.
7. 
Labor hours per month  40000 hours
Time to make one hood  4 hours
Manufacturing capacity per month  10000 hoods
10% Scrapped due to quality issues, total final output  9000
Output (Each unit sold @£125 per item)  1125000
Input calculation 
Labor costs per month (40,000 labor hours @£15 per
hour)  600000
Material costs per month @£40 per item  400000
Overhead costs  350000
Total Input  1350000
Multifactor Productivity  0.833333
Labor Productivity  0.25 0.25 hoods / hour
Option 1: increase sales by 20 percent by reducing
selling price by 10 percent 
New demand due to promotion  10800
Number of units to be manufactured by considering
quality issues  11880
Labor hours required to match the output @ 4 hours per
unit  47520
Output (Each unit sold @£125 per item)  1350000
Labor costs per month (47,250 labor hours @£15 per
hour)  712800
Material costs @ £40 per item  475200
Total Input (Material Costs + Labor costs + Overhead
costs)  1538000
Multi Factor Productivity  0.877763
Option 2: Improve quality by hiring skilled labor at
£20 per hour 
Number of units manufactured  10000
Output (Each unit sold @£125 per item)  1250000
Input calculation 
Using Operations to Create Value   CHAPTER 1 