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A program to introduce time standards is being instituted in an existing plant that has operated for years without them. The plant has 137 workers
A program to introduce time standards is being instituted in an existing plant that has operated for years without them. The plant has 137 workers and works one shift (2000 hr/yr). All of the tasks are repetitive with average cycle times of about 20 min. It is estimated that the average time to set a time standard will be 4.0 hr and that the increase in productivity in the plant will be 25%. The plant is basically a high production facility that produces the same product year after year. The number of batches produced by each worker per year averages 7.5, and batch quantities are very high. The proportion of new part styles introduced per year can be considered nil, since the same items are produced each year. (a) How much total analyst time will be required to set standards for all of the jobs in the plant? (b) How many workers will be required in the facility after standards are introduced, if the productivity improvement of 25% holds true? (c) If the annual salary of the analysts is $75,000, including fringe benefits, and the average wage of workers in the facility is $25.00 per hour, including fringe benefits, is the cost of introducing standards justified
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