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Tommy is the production manager at our Paris, TX Plant. He is in charge of the Prego Spaghetti Sauce Line. This fiscal year's production schedule
Tommy is the production manager at our Paris, TX Plant. He is in charge of the Prego Spaghetti Sauce Line. This fiscal year's production schedule was 1.2 million cases, utilizing 250,000 direct labor hours (labor rate at $15 per hour), supervisor overhead 50,000 hours (wage $50 per hour). Energy consumption was 30 million therms ($1.02 per therm. A therm is 100,000 BTUs). 1. What is the labor productivity in cases of Prego per labor dollar, in the current fiscal year? [ Select ] 2. What is the multi-factor productivity (labor, supervisor overhead and energy) in cases of Prego per total invested dollar? 0.0426 An automation system was proposed for next fiscal year, to reduce direct labor and supervisor overhead. This system, costs $750,000, would drive direct labor cost down by 15% (212,500), supervisor overhead down by 10% (45,000). Tommy expects Prego production would go up by 25% in the next fiscal year. The vendor proposed a multi-factor productivity gain (vs. current fiscal) to reach 5%. 3. What would be the supervisor overhead productivity increase, after such automation system installed in the new fiscal (1.5 million cases output) year, as compared to the current fiscal year (1.2 million cases output)? [ Select ] 4. What would be the multi-factor productivity increase, after such automation system installed in the new fiscal (1.5 million cases output), as compared to the current fiscal year (1.2 million cases output)? New fiscal year would have $750,000 investment, while the current fiscal year has no investment. Energy consumption is directly proportional to cases produced, if output is up, then energy usage goes up accordingly. [ Select ] 5. Did we reach 5% multi-factor productivity gain vs. last fiscal year, after investing $750,000 for such automation [ Select ]
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