Problem 2 A work sampling study of the shipping department of an automotive lifting equipment plant, is used in determining the handling and shipping costs. Work activities include staging and cleaning the lift components, placing the necessary decals, preparing the wooden shipping crates, securing the lift components inside the crates, preparing and attaching the shipping documents. The shipping Department works 50 weeks per year (40 Hours per week) A two-week work sampling study of 80 hours of the work crew of four employees, each is paid an Hourly Rate of $ 18:00 provided the following observations, during this period 40 lifts were shipped Activities Number of observations 1. Staging and cleaning components 150 2. Placing decals on components 50 3. Preparing wooden crates 250 4. Packaging equipment 100 5. Searching for tools and materials 60 6. Personal time 80 7. Idle time (Waiting on equipment and tools) 110 Total (800) 1. If the Company is considering improving Work Flow and reducing the Idle Time by 60 percent, provide an estimate of the Annual Cost Saving, and the improved shipping labor cost per lift. 2. If the company is also considering outsourcing Activity 3 : Preparing Wooden Crates, and wishes to obtain an accurate Estimate of the current Activity cost with 90% Confidence, and 4% Confidence Interval (1); how many additional observations are necessary to achieve that? Problem 2 A work sampling study of the shipping department of an automotive lifting equipment plant, is used in determining the handling and shipping costs. Work activities include staging and cleaning the lift components, placing the necessary decals, preparing the wooden shipping crates, securing the lift components inside the crates, preparing and attaching the shipping documents. The shipping Department works 50 weeks per year (40 Hours per week) A two-week work sampling study of 80 hours of the work crew of four employees, each is paid an Hourly Rate of $ 18:00 provided the following observations, during this period 40 lifts were shipped Activities Number of observations 1. Staging and cleaning components 150 2. Placing decals on components 50 3. Preparing wooden crates 250 4. Packaging equipment 100 5. Searching for tools and materials 60 6. Personal time 80 7. Idle time (Waiting on equipment and tools) 110 Total (800) 1. If the Company is considering improving Work Flow and reducing the Idle Time by 60 percent, provide an estimate of the Annual Cost Saving, and the improved shipping labor cost per lift. 2. If the company is also considering outsourcing Activity 3 : Preparing Wooden Crates, and wishes to obtain an accurate Estimate of the current Activity cost with 90% Confidence, and 4% Confidence Interval (1); how many additional observations are necessary to achieve that
