Worked problems (Show calculations in order to get full credit) 1. 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: (10 points) Last Year This Year Output 11,200 units 13,000 units Labor (hours) 10,000 10,200 Utilities (BTUs) 5,600 6,250 Capital $81,000 $86,000 The CEO determines his costs to be as follows: Labor $20 per hour Utilities $0.60 per BTU Capital 20% per month of investment. Show the productivity change, for one month last year versus one month this year, on a multifactor basis. 2. A small software development project has 9 major activities. The times are estimated and provided in the network below. [15 points] A + B 00 c 3 D WG 3 WN 5 G I 7 3 (a) Using the method of ES, EF, LS, and LF, determine the project completion time? (b) Find the critical path(s). (c) State the non-critical activities. (d) Explain what it means if an activity has a slack of zero (give an example). (e) Explain what it means if an activity has a slack of non-zero (give an example) 3. Favors Distribution Company purchases small imported trinkets in bulk, packages them, and sells them to retail stores. They are conducting an inventory control study of all their items. The following data for the year 2006 are for one such item, which is not seasonal. [12 Points] Month Sales Jan 15 Feb Mar Apr May Jun 18 14 12 19 Jul Aug 10 11 15 a. Use trend projection to estimate the relationship between time and sales (state the trend line equation in this problem). Show the calculations of the intercept and the slope. b. Interpret the meaning of the slope in this problem. c. Calculate forecasts for February 2007, April 2007, and February 2008 Formulas LF-EF or LS-ES EF = Estt LS = LF ~ t =LF-t 2 3 t 6 Output Input a + 4m+b 6 5 Output Labor+ Capital + Energy