Howard, Inc produces carbon graphite fiber shafts for Calloway golf clubs. Last year their average monthly production included 19,000 shafts using 1 shift of 3 technicians working 20 days a month and 8 hours a day. Of the items produced, 15% were deemed defective and were scrapped due to poor tensile strength.
Recently, Howard, Inc took your recommendation to revise the process and production method. Your process requires an additional technician to do final product tensile strength verification. As a result, monthly production has increased to 24,000 units with defects reduced to 9%.
a. Compute the productivity ratios for the old and the new production systems.
b. You have to report to the Operations Manager about the impact of your new process. What will you report? What will you recommend?