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

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Labor costs per month (@£20 per hour)  800000
Material costs per month (@£40 per item)  400000
Total Input (Material costs + Labor costs+ Overhead
costs)  1550000
Multi Factor Productivity  0.806452
Option 3: Reduce material costs by 10 percent 
Total Output  1125000
Regular labor costs (40,000 labor hours @ £15 per hour)  600000
Material costs (@£36 per item)  360000
Total Input (Material costs + Labor costs + Overhead
costs)  1310000
Multi Factor Productivity  0.858779
From the analysis, Option 1 seems to have the greatest impact on the multifactor productivity measure, so
Thomas Cope can work on increasing their sales by reducing the sales price by 10 percent. 
8.  Mariah Enterprises Productivity of Process Alpha and Process Beta
Excel used to perform all calculations
Process 
Alpha  Beta 
Total Value of Output  $17,150  $16,450 
Total Cost of Labor  $2,600  $3,000 
Total Cost of Materials  $5,500  $4,900 
Total Cost of Overhead  $6,000  $5,000 
Labor Productivity  $6.596  $5.483  unit $/ labor $
Multifactor Productivity  $1.216  $1.275  unit $/ total $
Process alpha has 20% [(6.596-5.483)/5.483] higher labor productivity.
Process beta has 5% [(1.275-1.216)/1.216] higher multifactor productivity.
While process beta generates more dollars of output per dollar invested in input, it
doesn’t use labor as efficiently as process alpha.
Using Operations to Create Value   CHAPTER 1 
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9.  Current Labor and Multifactor Productivity
Labor and productivity after new products are added
Wraps  Bowls  Burgers
Waffles and
Ice-cream  Total
Output in £  £1,000  £1,650  £600  £405.00  £3,655
Labor costs  £160
Material costs  £225.00  £420.00  £175.00  £135.00 £955.00
Equipment cost  £125  £350  £475
Overhead costs  £175  £100  £275
Labor
Productivity  £22.84
Multifactor
Productivity  1.96
The multifactor productivity has reduced from 2.54 to 1.96. In order to maintain
the same level of multifactor productivity, Akiko has to sell more waffles and ice-
cream.
This can be identified using the formula:
(Assume x stands for the combined units of waffles and ice-cream that need to be
sold)
Output/Input = Revenue generated/Labor cost + Material Cost + Equipment Cost +
Overhead Cost
2.54 = 250 × 4 + 300 × 5.50 + 100 × 6 + 4.50 ×