Question

A company operates a 40-hour workweek and employees are paid $ 18 and hour. Two options for improving the process for serving clients are being evaluated. Option A will require the use of more consumable materials, but will speed up the process and allow the staff to server more customers per week. Option B is slower, but costs less in consumable materials. The data from week long beta tests of each option is provided below: Overhead is 0.5 times labor costs. Week Number of Employees Customers Processed Material cost per Customer ($) A 4 116 $2.03 B 3 91 $ 1.09 Enter the multi factor productivity value for the better option.

Answer 1

UNIT	TOTAL LABOR COST	OVERHEAD	MATERIAL	OUTPUT	PRODUCTIVITY
1	4 * 40 * 18 = 2880	2880 * 0.5 = 1440	235.48	116	116 / (2880 + 1440 + 235.48) = 0.0335698658362948
2	3 * 40 * 18 = 2160	2160 * 0.5 = 1080	184.73	91	91 / (2160 + 1080 + 184.73) = 0.02657143775

HIGHER PRODUCTIVITY IS SHOWN IN WEEK A = 0.033569

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