7/23/2020 MSC 301

Assignment 1

Dibakar Das
ID: 17104098
Section: 02
Course Instructor: Hasan Maksud Chowdhury
(HMC)
Answer to the question no. 1

a. Labour Productivity = Output(unit) / no. of labour

Labour productivity
Anniversary = 300/8 = 37.5 meals/worker
Wedding = 240/6 = 40 meals/worker

So, in the anniversary celebration the labour productivity was higher.

b. Possible reasons for the productivity differences are: no. of labour, change in menu, working
hours etc.

Answer to the question no. 2

Labour Productivity per worker = Yards installed / crew size

Week Crew Size Yards installed Labour Productivity per worker

1 4 96 96/4 = 24 per worker
2 3 72 72/3 = 24 per worker
3 4 92 92/4 =23 per worker
4 2 50 50/2 = 25 per worker
5 3 69 69/3 = 23 per worker
6 2 52 52/2 = 26 per worker

As we can see in the week 6, the carpeting conducted max production with less workers.

Answer to the question no. 3

Labour cost = no. of workers*working hours*hourly wage

OH cost = labour cost*1.5

Material cost = materials (lbs)*material cost per lb

Total cost = labour cost+ OH cost+ Material cost

Multifactor productivity (MFE) = output/total cost

 wee outpu No. of Material Labour Overhead Materi Total cost Multifactor
k t workers s Cost cost(OH) al cost Productivity
(lbs) (MFE)
1 30000 6 450 6*40*12 2880*1.5 450*6 (2880+4320+2700) (30000/9900)
= 2880 =4320 =2700 =9900 =3.03
2 33600 7 470 7*40*12 3360*1.5 470*6 (3360+5040+2820) (33600/11220)
=3360 =5040 =2820 =11220 =2.99
3 32200 7 460 7*40*12 3360*1.5 460*6 (3360+5040+2760) (32200/11160)
=3360 =5040 =2760 =11160 =2.89
4 35400 8 480 8*40*12 3340*1.5 480*6 (3840+5760+2880) (35400/12480)
=3840 =5760 =2880 =12480 =2.84

Multifactor productivity dropped by (3.03-2.84) = 0.19 from week 1 to week 4.

Answer to the question no. 4

a. Before buying new products

Labour productivity = output/no. of labour
= 80/5 = 16 cart per worker per hr.
After buying new products
Labour productivity = output/no. of labour
= (80+4) / (5-1) = 21 cart per working per hr.

b. Before buying new products

Multifactor productivity = labour + equipment
Labour = 5 workers * $10 per hr.
= $ 50 per hour
Equipment = machine cost = $ 40 per hour

MFP = output/ total cost

= 80 carts / ($50+$40)

= 0.89 cart per $

After buying new products

Multifactor productivity = labour + equipment

Labour = 4 workers * $10 per hr.

= $ 40 per hour
Equipment = machine cost = $ 40/hr + $10/hr = $50/hr

MFP = output/ total cost

 = 84 carts / ($50+$40)

= 0.93 cart per $

c.

After purchasing new equipment labour productivity increases. Besides when the cost of multifactor
productivity increases and multifactor productivity became more efficient to make per cart at a low
price.

Answer to the question no. 5

Suppose x worker are working on output of 72 unit per hours

We knows labour productivity = output / no. of labour

With 10% scrap rate, labour productivity = 72/x units per labour hours

Without scrap rate,

Output = 72/80 units per labour hours

Labour productivity = 80/x unit per hours

current productivity− privious productivity

Labour productivity = ∗100
privious productivity
80 72
−
x x
Increase =
72
∗100
x
= 11.10%

Answer to the question no. 6

Current productivity = output/ no. of labour

= 160 unit/ 40 hours

= 4 unit per hour

Previous productivity = 138 unit/ 36 hours

= 3.83 unit per hour

 current productivity− privious productivity
Productivity growth = ∗100
privious productivity
4−3.83
= ∗100
3.83
= 4.44%

Yes, the productivity increased by 4.44%

Answer to the question no. 7

a.

Labour cost = no. of workers*working hours*hourly wage

OH cost = labour cost*1.0

Material cost = customers * $5 per customer

Total cost = labour cost+ OH cost+ Material cost

Multifactor productivity (MFE) = output/total cost

unit empl Custome Labour Overhead Materi Total cost Labour Multifactor
oyees rs Cost cost(OH) al cost Productivit Productivity (MFE)
y
A 4 36 4*8*25 800*1.0 36*5 (800+800+1 36/4 = 9 36/1780 = 0.02
=800 =800 =180 80) =1780
B 5 40 5*8*25 1000*1.0 40*5 (1000+1000 40/5 = 8 40/2200 = 0.02
=1000 =1000 =200 +200)
=2200
C 8 60 8*8*25 1600*1.0 60*5 (1600+1600 60/8 = 7.5
=1600 =1600 =300 +300) 60/3500 = 0.02
=3500
D 3 20 3*8*25 600*1.0 20*5 (600+600+1 20/2 = 6.67 20/1300 = 0.02
=600 =600 =100 00) =1300

b.

Labour cost = no. of workers*working hours*hourly wage

Customers per day = main customers per day from part a + (employees* 1 additional customer per day)
 OH cost = labour cost*1.0

Material cost = customers * $5 per customer

Total cost = labour cost+ OH cost+ Material cost

Multifactor productivity (MFE) = output/total cost

unit empl Custome Labour Overhead Materi Total cost Labour Multifactor
oyees rs Cost cost(OH) al cost Productivit Productivity (MFE)
y
A 4 40 4*8*25 800*1.0 40*5 (800+800+1 40/4 = 10 40/1780 = 0.02
=800 =800 = 200 80) =1780
B 5 45 5*8*25 1000*1.0 45*5 (1000+1000 45/5 = 9 45/2200 = 0.02
=1000 =1000 =225 +225)
=2225
C 8 68 8*8*25 1600*1.0 68*5 (1600+1600 68/8 = 8.5
=1600 =1600 =340 +340) 68/3500 = 0.02
=3540
D 3 23 3*8*25 600*1.0 23*5 (600+600+1 23/3 = 7.67 23/1300 = 0.02
=600 =600 =115 15) =1315

Answer to the question no. 8

Company A reduce time = 10 min = $3.50 per search

Company B reduce time = 12 min = $3.60 per search

Time Search time (Avg) Cost output Productivity

Recent 40 min 40 min * $2/min $ 400 $400/$80 = $5
= $80
Company A (40-10) 30 min (30 min * $ 400 $400/ $63.50 =
$2/min)- $3.50 $6.30
per search = $
63.50
Company B (40-12) 28 min (28 min * $ 400 $400/$59.60 =
$2/min)- $3.60 $6.71
per search = $
59.60

So it shows, output in terms of standard price rather than in units.

Answer to the question no. 9

Employees = 3

Each employee earns $25/hour works 40 hours/week

Each employee identifies an average of 3000 leads per week

The sign up rate is 4%

Revenue = $70 per sign up

Material cost = $1000 per week

OH cost = $9000 per week

Multifactor productivity = fees generated per dollar of input

3000leads /employee ×3 employees ×.04 signups/lead × $ 70/signup

MFP =
( 3 employee × 40 hours /employee × $ 25 /hour )+ $ 1000+ $ 9000
$ 25200
MFP =
$ 13000
= 1.94

Multifactor productivity 1.94