Question
6. An IPS manufacturing company changes the production system from the present system to a new system. With the present system, the company uses 40
6. An IPS manufacturing company changes the production system from the present system to a new system. With the present system, the company uses 40 workers, who can produce on an average 20 and 30 IPS per day of type-1 and type-2 respectively, but on average 10% manufactured IPS are rejected. Each worker receives Tk.12000 per month and tools and equipment cost (i.e., machine cost for the first system) was Tk.30000 per day. With the new system, the company can produce 40 and 60 IPS per day of type-1 and type-2 respectively with no rejection. The machine of the new system costs 60 million takas and the operation life of the machine is 8 years. Five operators are required to operate the new machine. The wage of each of the operators is Tk.30000 per month. The price of the type-1 and type-2
IPS is Tk.25000 and Tk.32000 per unit respectively. Part/material cost is 40% and 45% of the price of type-1 and type-2 respectively. Consider 25 working days in a month. a) Compute labor and machine productivity under each system. b) Compute the overall productivity under each system. c) Explain what the main factor of this productivity is.
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