Principles of Operations Management: Sustainability and Supply Chain Management 10th Global Edition
(a) What was their raw material and their labor productivity with the standard equipment?
(b) What is their raw material and their labor productivity with the larger machine?
(c) What is the change in each productivity measure?
Answer:
Resource | (a) Standard Equipment | (b) Larger Machine | (c) Percent Change |
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Labor | ![]() |
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Diff: 2
Key Term: Productivity
AACSB: Analytical thinking
LO: 1.4 Compute single-factor productivity
105) The Dulac Box plant produces wooden packing boxes to be used in the local seafood industry. Current operations allow the company to make 500 boxes per day, in two 8-hour shifts (250 boxes per shift). The company has introduced some small changes in equipment, and conducted appropriate job training, so that production levels have risen to 300 boxes per shift. These changes did not require any change in the amount of capital spending or energy use. What is the firm's new labor productivity?
Answer: 600 boxes per day / 16 hours = 37.5 boxes per hour
Diff: 2
Key Term: Productivity
AACSB: Analytical thinking
LO: 1.4 Compute single-factor productivity
106) Mark's Ceramics spent $4000 on a new kiln last year in the belief that it would cut annual energy usage 25% over the old kiln. This kiln is an oven that turns "greenware" into finished pottery. Mark is concerned that the new kiln requires extra labor hours for its operation. Mark wants to check the energy savings of the new oven, and also to look over other measures of their productivity to see if the change really was beneficial. Mark has the following data to work with:
Last Year | This Year | |
Production (finished units) | 4000 | 4000 |
Greenware (pounds) | 5000 | 5000 |
Labor (hrs) | 350 | 375 |
Capital ($) | 15000 | 19000 |
Energy (kWh) | 3000 | 2600 |
Were the modifications beneficial?
Answer: The energy modifications did not generate the expected energy savings; also, labor and capital productivity decreased.
Resource | Last Year | This Year | Change | Pct. Change |
Labor | 4000 / 350 = 11.43 | 4000 / 375 = 10.67 | -0.76 | -6.65% |
Capital | 4000 / 15000 = 0.27 | 4000 / 19000 = .21 | -0.060 | -22.22% |
Energy | 4000 / 3000 = 1.33 | 4000 / 2600 = 1.54 | 0.21 | 15.79% |