Chapter 2 Productivity Problems with sample solutions

Problem 1:

A company that processes fruits and vegetables is able to produce 400 cases of canned peaches
in one-half hour with four workers. Each worker is paid 2 Rials per hour. What is labor
productivity in terms of cases/hour, cases/rial?

output
Productivity=
input

Productivity in cases/hour

400(cases)
productivity= =266.67 cases/hour
1.5 (hours)

Productivity in cases/rial

output 400(cases)
productivity= =
input 2 ( Rials per hours per worker ) × 1.5 ( hours ) × 4 ( workers )=¿ ¿

productivity=33.33 cases per rial

Problem 2:

A company that processes fruits and vegetables is able to produce 6400 cases of canned peaches
in a day with four workers. Each worker is paid 2 Rials per hour. What is labor productivity in
terms of cases/day, cases/worker?

Productivity (cases /day)

6400(cases)
productivity= =6400 cases/day
1(day )

Productivity (cases/worker)

6400(cases)
Productivity= =1600 cases/worker
4(workers)
Problem 3:

A company that processes fruits and vegetables is able to produce 400 cases of canned peaches
in one-half hour with four workers. Each worker is paid 2 Rials per hour. What is the change in
labor hours if output remains the same and the labor productivity in terms of cases/hour
increased by 20%?

Current productivity = 33.33 cases/Rial

New productivity = 1.2 ×33.33=39.996 cases /rial

For new labor hours

400(cases)
productivity=39.996=
2 ( Rials per hours per worker ) × X ( hours ) × 4 ( workers ) =¿ ¿

X =1.25 hours

Problem 4
Determine the productivity for these cases:
a. Four workers installed 720 square yards of carpeting in eight hours.

720( yards)
productivity= =9 yards /hour
8 (hours)

b. A machine produced 70 pieces in two hours. However, two pieces were unusable.

output 70 ( gross )−2 ( loss )

productivity= = =34 pieces/hour
input 2(hours)

Problem 5
Determine the multifactor productivity for the combined inputs of labor and machine time,
materials and overhead using the following data:
Output: 7,040 units
Input
Labor: $1,000
Materials: $520
Overhead: $2,000
 Output Output
multi factor productivity = =
Input Labor + Material+Overhead

7040(units)
¿ =0.858 units/ $
1000+ 5200+2000

Problem 6

A company that processes fruits and vegetables is able to produce 800 cases of canned peaches
in one-half hour with four workers. What is labor productivity?

Problem 7

A company that processes fruits and vegetables is able to produce 500 cases of canned peaches
in one-half hour with four workers. Each worker is paid 2 Rials per hour. What is labor
productivity in terms of cases/hour, cases/rial?

Problem 8

A company that processes fruits and vegetables can produce 9000 cases of canned peaches in a
day with four workers. Each worker is paid 3 Rials per hour. What is labor productivity in terms
of cases/day, cases/worker?

Problem 9

A company that processes fruits and vegetables is able to produce 500 cases of canned peaches
in one-half hour with four workers. Each worker is paid 4 Rials per hour. What is the change in
labor hours if output remains the same and the labor productivity in terms of cases/hour
increased by 50%?
Problem 10

A wrapping-paper company produced 2,000 rolls of paper one day. Labor cost was $160,
material cost was $50, and overhead was $320 on a daily basis. Determine the multifactor
productivity.

Problem 11
Compute the multifactor productivity measure for an eight-hour day in which the output was 300
units, produced by three workers who used 600 pounds of materials. 10% of the output was not
usable and had to be scrapped. Workers have an hourly wage of $20, and material cost is $1 per
pound. Overhead is 1.5 times labor cost.

Daily productivity
Net output=0.9× 300=270 units
Inputs
$
Material cost=600 ( pounds ) ×1 =600 $
pound
Labor cost=number of worker × hours worked × hourly wage¿ 3 ×8 × 20=480 $
¿ head cost=1.5 ×labor cost=1.5 ×480=720 $

Net Output 270

multifactor productivity = = =0.15 units/ $
Material cost+ Labor cost +Overhead cost 600+ 480+720

a. If due to methods improvement, all the output was usable, compute multifactor productivity
in terms of units per dollar?

Daily productivity
Net output=300 units
Inputs
$
Material cost=600 ( pounds ) ×1 =600 $
pound
Labor cost=number of worker × hours worked × hourly wage¿ 3 ×8 × 20=480 $
¿ head cost=1.5 ×labor cost=1.5 ×480=720 $

Net Output 300

multifactor productivity = = =0.1667 units/ $
Material cost+ Labor cost +Overhead cost 600+ 480+720
b. If due to methods improvement, all the output was usable, but the material cost increased by
20%, compute multifactor productivity in terms of units per dollar?

Daily productivity
Net output=300 units
Inputs
Material cost=600 ( pounds ) ×1.2 $ per pound=720 $
Labor cost=number of worker × hours worked × hourly wage¿ 3 ×8 × 20=480 $
¿ head cost=1.5 ×labor cost=1.5 ×480=720 $

Net Output 300

multifactor productivity = = =0.156 units /$
Material cost+ Labor cost +Overhead cost 720+480+ 720

c. If due to methods improvement, the usable output increased by 5%, find the old and new
labor productivity and the change in labor productivity in terms of units per labor hour?

Problem 12:
A health club has two employees who work on lead generation. Each employee works 40 hours
a week, and is paid $20 an hour. Each employee identifies an average of 400 possible leads a
week from a list of 8,000 names. Approximately 10 percent of the leads become members and
pay a onetime fee of $100. Material costs are $130 per week, and overhead costs are $1,000 per
week. Calculate the multifactor productivity for this operation in fees generated per dollar of
input.