Archer Contracting repaved 50 miles of two-lane county roadway with a crew of six employees. This crew worked 8 days and used $7000 worth of paving material. Nearby, Bronson Contracting repaved 35 miles of four-lane interstate roadway working 10 days with a crew of five employees using $9000 of paving material. Both Archer Contracting and Bronson Contracting rented the same paving equipment to complete their respective assignments, costing each $1500 a day, and labor cost per employee is $160 a day for both companies. Which company is more productive and by how much?
a. Bronson Contracting is more productive by about 16.7%
b. Bronson Contracting is more productive by about 20.9%
c. Archer Contracting is more productive by about 16.7%
d. Archer Contracting is more productive by about 20.9%
e.Archer Contracting is more productive by about 71.3%
Archer Contracting :
Length of roadway repaved = 50 miles of two lane country road
Cost of labor = $ 160 / employee-day x 6 employees x 8 days = $7680
Cost of equipment = $1500/day x 8 days = $12000
Cost of material = $7000
Total cost of labor , equipment and material = $7680 + $12000 + $7000 = $26680
Therefore , Multifactor productivity = Length of 2 lane roadway repaved/ Total cost = 50 / 26680 = 0.00187
Boston consulting :
Length of roadway repaved = 35 miles of 4 lane country road = 70 miles of 2 lane country road
Cost of labor = $ 160 / employee-day x 5 employees x 10 days = $8000
Cost of equipment = $1500/day x 10 days = $ 15000
Material cost = $9000
Total cost of labor equipment and material = $8000 + $15000 + $9000 = $32,000
Therefore , Multifactor productivity = Length of 2 way roadway repaved/ Total cost = 70 / 32000 = 0.00218
Thus,
Multifactor productivity of Bronson contracting ( 0.00218 ) > Multifactor productivity of Archer Contracting ( 0.00187)
Hence, BRONSON CONTRACTING IS MORE PRODUCTIVE
Percentage by which Bronson Contracting is more productive = ( 0.00218 – 0.00187)/0.00187 x 100 = 16.57% ( this is nearest to the value of 16.7% as mentioned in possible answer )
Therefore correct answer will be “Bronson Contracting is more productive by 16.7%”
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ANSWER : a ) BRONSON CONTRACTING IS MORE PRODUCTIVE BY 16.7% |
Archer Contracting repaved 50 miles of two-lane county roadway with a crew of six employees. This...
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