E. Jones Ltd, a light engineering company, wishes to know if they are maintaining the manufacturing average of 3% increase in productivity. The data in Table Old represents a month from last year and an equivalent month this year. Calculate the productivity change for each category using the costs provided, show the productivity change on a multifactor basis with euro as the common denominator.
1) Productivity change for each category –
Productivity = Output / Input
Don't use plagiarized sources. Get Your Custom Essay on
Question & Answer: E. Jones Ltd, a light engineering company, wishes to know if they are maintaining the manufacturing…
GET AN ESSAY WRITTEN FOR YOU FROM AS LOW AS $13/PAGE
So, for each category, change in the productivity has to be calculated.You cannot add the categories together because they do not share the same units.
|Labour (hours)||1000/300 = 3.33||1000/275 = 3.64||3.64 – 3.33 = 0.31|
|Material (000kg)||1000/10000 = 0.1||1000/11000 = 0.09||0.09 – 0.1 = -0.01|
|Energy (BTU)||1000/3000 = 0.33||1000/2850 = 0.35||0.35 – 0.33 = 0.02|
Then for the improvement in the labour category:
0.31/3.33 = 0.093 or 9.3% improvement over last year.
|Labour (hours)||300*10 = 3000||275*10 = 2750|
|Material (000Kg)||10000*5 = 50000||11000*5 = 55000|
|Energy (BTU)||3000*0.50 = 1500||2850*0.50 = 1425|
Multifactor productivity for last year = 1000/54500 = 0.018 units/
Multifactor productivity for current year = 1000/59175 = 0.016 units/
Change in productivity = 0.016/0.018 = 0.088 or 8.8%