1. Business
  2. Operations Management
  3. please answer question 2 and 3 i will give...

Question: please answer question 2 and 3 i will give...

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?
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution