Investment and Productivity Percentage Change

Topics: Investment, Capital accumulation, Saving Pages: 2 (342 words) Published: January 20, 2014
Homework 1
1. In December, General Motors produced 6,600 customized vans at its plant in Detroit. The labor productivity at this plant is known to have been 0.10 vans per labor-hour during that month. 300 labors were employed at the plant that month. a) How many hours did the average laborer work that month?

b) If the productivity can be increased to 0.11 vans per labor-hour, how many hours would be average laborer work that month?

2. George Kyparisis makes bearing balls in Miami plant. With recent increases in his costs, ha has a new found interest in efficiency. George is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of 3% increase in productivity a month from last year and equivalent month this year:  

LAST YEAR
THIS YEAR
Units Produced
1,000
1,000
Labor (hours)
300
275
Resin (pounds)
50
45
Capital invested ($)
10,000
11,000
Energy (BTU)
3,000
2,850

Show the productivity percentage change for each category and then determine the improvement for labor-hours, the typical standard for comparison.

3. George Kyparisis (using data from Problem 2) determines his costs to be as follows: a. Labor: $10 per hour
b. Resin: $5 per pound
c. Capital expense: 1% per month of investment
d. Energy: $0.50 per BTU
Show the percent change in productivity for one month last year versus one month this year, on a multifactor basis with dollars as the common denominator. 4. Brown’s, a local bakery, is worried about increased costs-particularly energy. Last year’s records can provide a fairly good estimate of the parameters for this year. Wende Brown, the owner, does not believe things have changed much, but she did invest an additional $3,000 for modifications to the bakery’s ovens to make them more energy efficient. The modifications were supposed to make the ovens at least 15% more efficient. Brown has asked you to check the energy savings of the new...
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