Operations & Production Management SESSION 2 BY Saad Waqas Productivity Challenge Productivity Challenge Productivity Challenge Productivity Challenge Productivity Challenge Productivity Challenge Ethics & Social Responsibility Example Problem 2 ( Book Pg. No 14 ) Collins Title Insurance Ltd. wants to evaluate its labor and multifactor productivity with a new computerized title-search system. The company has a staff of four, each working 8 hours per day (for a payroll cost of $640/day) and overhead expenses of $400 per day. Collins processes and closes on 8 titles each day. The new computerized title-search system will allow the processing of 14 titles per day. Although the staff, their work hours, and pay are the same, the overhead expenses are now $800 per day. Requirements: Labor Single Factor Productivity & Multifactor Productivity Reference: Operations management 12th Edition by Jay Heizer, Barry Render & Chuck Munson Problem 1.1 ( Book Pg. No 22 ) Chuck Sox makes wooden boxes in which to ship motorcycles. Chuck and his three employees invest a total of 40 hours per day making the 120 boxes. a) What is their productivity? b) Chuck and his employees have discussed redesigning the process to improve efficiency. If they can increase the rate to 125 per day, what will be their new productivity? c) What will be their unit increase in productivity per hour? d) What will be their percentage change in productivity? Reference: Operations management 12th Edition by Jay Heizer, Barry Render & Chuck Munson Problem 1.16 ( Book Pg. No 22 ) Susan Williams runs a small Flagstaff job shop where garments are made. The job shop employs eight workers. Each worker is paid $10 per hour. During the first week of March, each worker worked 45 hours. Together, they produced a batch of 132 garments. Of these garments, 52 were “seconds” (meaning that they were flawed). The seconds were sold for $90 each at a factory outlet store. The remaining 80 garments were sold to retail outlets at a price of $198 per garment. What was the labor productivity, in dollars per labor-hour, at this job shop during the first week of March? Reference: Operations management 12th Edition by Jay Heizer, Barry Render & Chuck Munson Problem 1.16 ( Book Pg. No 23 ) Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes 1,000 tires per day with the following resources: Labor: 400 hours per day @ $12.50 per hour Raw material: 20,000 pounds per day @ $1 per pound Energy: $5,000 per day Capital costs: $10,000 per day a) What is the labor productivity per labor-hour for these tires at Lakefront Manufacturing? b) What is the multifactor productivity for these tires at Lakefront Manufacturing? c) What is the percent change in multifactor productivity if Fok can reduce the energy bill by $1,000 per day without cutting production or changing any other inputs? Reference: Operations management 12th Edition by Jay Heizer, Barry Render & Chuck Munson SELF TEST This year, Rocky Inc., will produce 57,600 hot water heaters at its plant in Delaware, in order to meet expected global demand. To accomplish this, each laborer at the plant will work 160 hours per month. If the labor productivity at the plant is 0.15 hot water heaters per labor-hour, how many laborers are employed at the plant? Reference: Operations management 12th Edition by Jay Heizer, Barry Render & Chuck Munson THANK YOU Video Links (if any) Topic/Unit 1 Topic/Unit 1 Operation Management Hard Rock Cafe https://youtu.be/lsWtwIcBBQg Industrial Revolution https://youtu.be/pl67IhTFH9g
