CASE STUDY 1:
ZYCHOL CHEMICALS CORPORATION
I. Problem(s): With all of the information gathered, has productivity increased at all? Should the accounting practices be further investigated?
II. When I started the single-factor productivity analysis it looked as if productivity were headed in the right direction '' up. Because the outcomes of both the units per RMU and units per labor hours had an increase, 3.59% and 4.79% respectively. Even with the increase in cost per barrel from $320 to $360 and the increase in one-dollar increase in the labor cost per hour from $13 to $14, there was a nice increase in productivity. We could have possibly trained our employees more efficiently by sending them to more trainings or we could have given employees incentives to those that outperformed themselves. With the RMU, we might have found a way to recycle and reuse our raw materials for other projects that benefited out plant. Those are all things that would allow the company to still see an increase in productivity while also having an increase in costs per unit. Then I got to the capital cost, the numbers did look at bit skewed compared to the rate change for the other two variables, but remembering that boss said that there was nothing that could be done about the allocation, I decided not to dig any deeper and continue my analysis. The unit per capital cost showed a 19.17% decrease. That is a significant drop in productivity. So what is this saying? Was there more equipment purchased than the employees could even handle? Do the employees not know how to efficiently use the equipment? Is the equipment depreciating more rapidly than we anticipated? Is the equipment even functioning properly? Another good question to raise about the capital, is that will this be a trend or one this a one-time happening? Now, with these numbers definitely not showing an increase in productivity, to get a broader and more complete view a multifactor productivity...
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