BUSN 3430 - Operations Management

Homework Assignment 1

1)This year, Benson, Inc., will produce 57,600 hot water heaters at its plant in Yulee, Florida, in order to meet expected global demand To accomplish this, each laborer at the Yulee plant will work 160 hours per month. If the labor productivity at the plant is 0.15 hot water heaters per labor-hour, how many laborers are employed at the plant.

2) Charles Lackey operates a bakery in Idaho Falls, Idaho. Because of its excellent product and excellent location, demand has increased by 25% in the last year. On far too many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differ- ently so that more loaves of bread can be baked at one time. This new process will require that the ovens be loaded by hand, requiring addi- tional manpower. This is the only thing to be changed. If the bakery makes 1,500 loaves per month with a labor productivity of 2.344 loaves per labor-hour, how many workers will Lackey need to add? (Hint: Each worker works 160 hours per month.

3) A company has asked you to evaluate the firm's productivity by comparing this year's

performance with last year's. The following data are available:

Last YearThis YearOutput3,000 units3,000 unitsLabor Hours450 400Utilities (BTUs)3,8004,250Capital$6,000$7,500

(a) Has the company improved its productivity during the past year in all the three

categories? Explain your results in percentage terms.

(b) Which category shows the greatest increase and which shows the least?

4. The CEO has asked you to evaluate the firm's productivity by comparing performance a

month from last year and equivalent month this year. The following data are available:

Last YearThis YearOutput3,000 units3,000 unitsLabor (hours)450 400Utilities (BTUs)3,8004,250Capital$6,000$7,500

The CEO determines his costs to be as follows:

• Labor $20 per hour
• Utilities $1.50 per BTU
• Capital 5% per month of investment.

Show the productivity change, for one month last year versus one month this year, on a

multifactor basis.