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George makes bowling balls in his plant. With recent increases in his costs, he has a newfound interest in efficiency. George is interested in determining the productivity of his organization. He would like to know organization is maintaining the manufacturing average of a 3% increase in productivity. He has the following data representing a month last year and an equivalent month this year: The productivity change for each of the inputs (Labor, Resin, Capital, and Energy) is: Labor Productivity Change = % (enter your response as a percentage rounded to two decimal places and include a minus sign necessary)
Expert Answer
1. Labor productivity for last year = 1000 units produced/300 labor hours = 3.33
Labor productivity for this year = 1000 units produced/275 labor hours = 3.64
Thus labor productivity change = (3.64-3.33)/3/33 = 9.09%
2. Resin productivity for last year = 1000 units produced/50 pounds = 20
Resin productivity for this year = 1000 units produced/46 pounds = 21.74
Thus resin productivity change = (21.74-20)/20 = 8.70%
3. Capital productivity for last year = 1,000 units/$10,000 = 0.10
Capital productivity for this year = 1,000/12,500 = 0.08
Thus capital productivity change = (0.08-0.10)/0.10 = -20.00%
4. Energy productivity for last year = 1000 units/3000 BTU = 0.33
Energy productivity for this year = 1000 units/2750 BTU = 0.36
Thus energy productivity change = (0.36-0.33)/0.33 = 9.09%
