2. Operations Management

###### Question details

PLEASE ANSWER QUESTION 2 and 3 !!!!!!!! I will give you a thumbs up guranteed

1. Columbia Industries makes bowling balls in its Texas plant. With rising costs, operations managers are interested in improving efficiency. The concern is if the organization is maintaining a 5% increase in productivity? The organization is using the following data representing a month from last year and an equivalent month this year.
 Last Year This year Units Produced 10,000 10,000 Labor in hours 30,000 27,500 Resin in pounds 500 450 Capital Invested $100,000$110,000 Energy (kWh) 30,000 28,500 Revenue $556,270$558,500

In addition to this above data, Columbia Industries has determined that labor costs $14.00 per hour, resin$6.00 per pound, capital expense is calculated based on 1% per month of investment, and energy costs for production.

Calculate the percent of change for labor, resin, capital, and energy and determine if the organization is maintaining a 5% improvement.

Productivity is given by following formula:

Productivity = Input/Output

(Note: The Energy cost per kWh is not given, so considering the value of energy is given in terms of $kWh) The single factor productivity and multifactor productivity per month is calculated as follows:  Last Year This Year Productivity Last Year This Year Productivity change in percentage Units produced 10000 10000 Labor in hours 30000 27500 Labor prod. (Hr/unit) = Labor in hours/units produced 30,000/10,000 = 3 2.75 (3 – 2.75)/2.75 x 100 = 9% Labor cost = Labor hours x ($14.00/hr) 30,000 hrs x $14 =$420,000 $385,000 Labor prod. ($/unit) = Labor cost/units produced 42 38.5 9% Resin in pounds 500 450 Resin prod. (Lb/unit) = Resin units/units produced 0.05 0.045 11% Resin Cost = resin in pounds x $6 per lb) 500 x$6 = $3,000$2,700 Resin prod. ($/unit) = Resin Cost/units produced 0.3 0.27 11% Capital Invested$100,000 $110,000 Energy (KWh) 30000 28500 Energy prod. ($/unit) = Energy Cost/units produced 3 2.85 5% Capital Expense = 1% of (capital invested + Energy cost) 0.01 x ($100,000 +30,000) =$1,300.00 $1,385.00 Capital Expense prod. ($/unit) = Capital Expense/units produced 0.13 0.1385 -6% Revenue $556,270$558,500 Total cost = Labor cost + Resin cost + Energy cost + Capital Expense $454,300$417,585 Multifactor productivity = Total cost/units produced 454,300/10000 = 45.43 41.7585 9%

The change in productivity taking This Year productivity as the base = (Last year productivity – This year productivity)/This year productivity x 100

Since overall productivity change is 9%, the organization is maintaining 5% improvement target.

1. Based on the original data presented in question 6, Columbia Industries now wants to determine the percent change in productivity for one-month last year versus one month this year, on a multifactor basis with dollars as the common denominator. Provide this information below.
1. Using the data for Columbia Industries, what was the return on investment for the two years presented above?