# Operations Management Chapter 1

Topics: Output, Costs, Input Pages: 3 (532 words) Published: September 17, 2011
Operations management
Week 1

Chapter 1:  Competing with Operations
Page 27, question 2:  Suds and Duds Laundry
A.
Week| Hours(input)| Shirts(output)| Ratio|
1| 24| 68| 2.83 Shirts/hour|
2| 46| 130| 2.83 Shirts/hour|
3| 62| 152| 2.45 Shirts/hour|
4| 51| 125| 2.45 Shirts/hour|
5| 45| 131| 2.91 Shirts/hour|
B. The output difference isn’t large between the input and output ratio. It seems as if producitivity may decline if there were more people working. If Suds and Dud has more than 2 or 3 workers on the amount of work per employee will decrease and there will be more room to be less productive. The laundry company may also not be able to handle the amount of business and have an overflow of work and not enough resources to handle. Page 28, question 3:  CD Player Production

The value of output is \$300
Value of Input: Labor + Materials + Over head
Productivity = Output/Input = \$300/ \$30+ \$70 +\$50 = 2.0
10% of productivity is 2.0 * 1.1 = 2.2
To find the Input I had to solve for x. Productivity = Output/input= \$300/X=2.2 Input = \$136
The cost of inputs = \$150-136 = \$14
A. \$14 reduction in material costs = \$14/\$70 = 20.0%
B. \$14 reduction in labor costs= \$14/\$30 = 46.7%
C. \$14 reduction in overhead is \$14/ \$50 = 28.0%

Page 28, question 5:  Alyssa's Custom Cakes
A. 5 Birthday cakes @ \$50 a cake = \$250
2 Wedding cakes @150 a cake = \$300
3 Specialty cakes @\$100 a cake= \$300
Alyssa’s has a monthly revenue of \$850.
We are given the Multifactor productivity ratio of 1.25.
1.25=\$850/X = \$680. This is the total cost for the 10 cakes. The average cost a cake is \$68 a cake.

B. Labor Productivity
Birthday= \$50/1.5 hours = \$33.3 a hour
Wedding= \$150/4 hours = \$37.50 a hour
Specialty= \$100/ 1 hours = \$100 a hour
c. The labor productivity shows that the specialty cakes are the cakes Alyssa should sell the most. \$100 in an hour worth of time shows the best profits compared to wedding and birthday...