Tutorial 1 Introduction to OM
1. Carbondale Casting produces cast bronze valves on a 10-person assembly line. On a
recent day, 160 valves were produced during an 8-hour shift.
a) Calculate the labor productivity of the line.
b) John Goodale, the manager at Carbondale, changed the layout and was able to
increase production to 180 units per 8-hour shift. What is the new labor productivity
per labor-hour?
c) What is the percentage of productivity increase?
(P1.2)
2. George Kyparisis makes bowling balls in his Miami plant. With recent increases in his
costs, he has a newfound 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 per year? He has the following
data representing a month from last year and an equivalent month this year.
(Labour: $10 per hour, Resin: $5 per pound, Capital expenses: 1% per month of
investment, Energy: $0.50 per BTU)
a) Show the productivity percentage change for each category and then determine the
improvement for labour-hours, the typical standard for comparison.
b) 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.
(P1.5 & P1.6)
3. Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok
makes 1,000 tires per day with the following resources:
Labor: 400 hours per day @ $12.50 per hour
Raw material: 20,000 pounds per day @ $1 per pound
Energy: $5,000 per day
Capital costs: $10,000 per day
a) What is the labor productivity per labor-hour for these tires at Lakefront
Manufacturing?
b) What is the multifactor productivity for these tires at Lakefront Manufacturing?
c) What is the percent change in multifactor productivity if Fok can reduce the energy
bill by $1,000 per day without cutting production or changing any other inputs?
(P1.8)
