Question

 1.5 George Kyparisis makes bowling balls in his Miami plant. With recent increases in his costs, he has a newfound interest inefficiency. George is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of 3% increase in productivity per year. He has the following data representing a month from last year and an equivalent month

 this year:

 Show the productivity percentage change for each category and then determine the improvement for labor-hours, the typical standard for comparison. Px

 1.6

 George Kyparisis (using data from Problem 1.5) determines his costs to be as follows:

 Labor: $10 per hour

 * Resin: $5 per pound

 • Capital expense: 1% per month of investment

 Energy: $0.50 per BTU

 Show 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. 

Answer 1

OLD PRODUCTVITY

VALUES:
LABOR = 3000
ENERGY = 1500
MATERIALS = 250
CAPITAL = 100

TOTAL OUTPUT = 1000

PRODUCTIVITY = TOTAL OUTPUT / TOTAL INPUT

PRODUCTIVITY = 1000 / (3000 + 1500 + 250 + 100) = 0.2062

2. NEW PRODUCTIVITY

VALUES:
LABOR = 2750
ENERGY = 1425
MATERIALS = 225
CAPITAL = 110

TOTAL OUTPUT = 1000

PRODUCTIVITY = TOTAL OUTPUT / TOTAL INPUT

PRODUCTIVITY = 1000 / (2750 + 1425 + 225 + 110) = 0.2217

3. CHANGE IN PRODUCTIVITY

CHANGE IN PRODUCTIVITY = NEW PRODUCTIVITY - OLD PRODUCTIVITY / OLD PRODUCTIVITY * 100

((0.2217 - 0.2062) / 0.2062) * 100 = 7.52%

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