C Productivity Problems

Dr. R. Jagadeesh. POM 2014

Page 1 of 2

Productivity - Practice Problems

1.

A government manufacturer produces fashionable garments. During a particular week

employees work 360 hours to produce a batch of 132 garments of which 52 were seconds
because of some defects. Seconds are sold for $90 each at the factory outlet store. The
remaining 80 garments are sold to retail distribution at $200 each. What is the labor
productivity ratio of this manufacturing process?
Labor productivity (Financial) =
Labor productivity (Financial) =

Value of the output

Employee hours
(80)(200) + (52)(90)
=57.44 dollars per hour
(360 hours per week)

Labor productivity (Operational) =

Labor productivity (Operational) =

Number of units produced

Employee hours
132
=0.367 garments per hour
(360 hours per week)

2.

A manufacturing company owns two units one in the US and the other in a less developed
country (LDC). The following data is available:
USA
LDC
Sales, units
100000 20000
Labor, hours
20000
15000
Raw materials, $ 20000
2000
Machine hours
60000
5000
a) Calculate the partial and total productivity measures. Do the results seem misleading?
b) Compute the multifactor productivity for labor and machine together. Are the results better?
c) Calculate the raw material productivity and explain.
Partial productivity measures
USA
LDC
Labor productivity, units per hour
5
1.33
Raw material productivity, units per $
5
10
Machine productivity, units per hour
1.67
4
Multi factor productivity (labor and machine hours)
1.25
1

3.

A retail store had sales of $ 45,000 in April and $ 56,000 in May. The store employs eight fulltime workers who work a 40 hour week. In April the store also had seven part-time workers at
10 hours per week and in May the store had nine part-time workers at 15 hours per week.
Using sales value as the measure of output, what is the percentage change in productivity from
April to May?

C Productivity Problems

Dr. R. Jagadeesh. POM 2014

Sales in $
Full time workers
Full time hours
Part time workers
Part time hours
Total labor hours
Labor productivity, $ per hour
Percent change in labor productivity
4.

April
45000
8
40
7
10
337
133.5312
21.912

Page 2 of 2

May
56000
8
40
9
15
344
162.7907

Various financial data for the years 1 and 2 is given in the following table. Calculate the total
productivity and partial measures for the company for both the years. What do these measures
tell you about this company?
Figures in $.
Year 1
Year 2
Sales
200,000 220000
Labor
30000
40000
Raw materials 35000
45000
Energy
5000
6000
Capital
50000
50000
Other
2000
3000
Partial productivity measures
Labor productivity, $ per $
Raw material productivity,$ per $
Energy productivity, $ per $
Capital productivity, $ per $
Other productivity, $ per $
Total productivity, $ per $

Year 1

Year 2

6.6667
5.7143
40.0000
4.0000
100.0000
1.6393

5.5000
4.8889
36.6667
4.4000
73.3333
1.5278