# For all the problems, to receive full scores, you have to show your

Category: Business & Finance

For all the problems, to receive full scores, you have to show your complete and accurate work. If you only provide the final answers without showing your computations, you will not be assigned a full score (or you will miss the opportunity of receiving partial credit).

Problem 1: Productivity and Productivity Growth (8 points)

The labor hours and units processed by your manufacturing facility are shown below.

 Oct Nov Dec Labor Hours 9,789 8,256 8,109 Units Processed 602,589 659,221 615,892

What is the productivity (in terms of units per labor hour) for each of the three months? (3 points)

What is the productivity growth from October to December? (2 points)

If the average hourly wage is \$12.50/hour, what is the productivity (in terms of units per labor dollar) for December? (2 points)

Problem 2: Efficiency and Utilization (8 points)

The engineering department has determined the standard output for a workstation is 914 units per hour. Assume this workstation was used 8 hours yesterday and produced 6,677 units.

What was the efficiency of the workstation yesterday? (2 points)

What output level would be needed to achieve 95% efficiency at this workstation? (2 points)

The greatest output this workstation could possibly achieve in a day is 22,991 units. What was yesterday’s utilization? (2 points)

What output level would be needed to achieve 95% utilization at this workstation? (2 points)

Problem 3: Total Cost and Breakeven Point (9 points)

Use the following variable and fixed costs for Speedy Oil Change to answer the questions below.

Variable Costs:

 Oil \$3 per oil change Labor \$6 per oil change Supplies \$2 per oil change

Fixed Costs:

 Building Lease \$4,000 per month Property Taxes \$3,500 per year Property Insurance \$200 per month Liability Insurance \$3,000 per year

What is the total annual fixed cost for Speedy Oil Change? (2 points)

What is the total variable cost (per oil change) for Speedy Oil Change? (2 points)

If Speedy Oil Change performed 5,000 oil changes last year, what was its total cost? (2 points)

How many oil changes does Speedy Oil Change need to perform in a year at \$30 per oil change to break even? (3 points)

Extra Credit: Little’s Law (5 points)

A computer repair company works five days per week and last week had the following new orders and end of day inventory levels. This company should be assumed to be operating at steady state so Little’s Law can be applied.

 Orders Ending On Hand (EOH) Units Monday 37 11 Tuesday 41 9 Wednesday 54 22 Thursday 62 24 Friday 31 14

What is the average arrival of orders per day? (1 point)

What is the average end of day inventory level? (1 point)

Using Little’s Law, what is the average amount of time a computer spent at the company Monday through Friday last week? (3 points)

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