Problem 1: Productivity and Productivity Growth (10 points) Wells Fargo Bank employs four loan officers, each working eight hours per day. Each officer processes an average of 4.0 loans per day. Each loan officer has a different salary, but the total payroll for the four loan officers combined is $533 per day.
What was the labor productivity (in loans per labor hour) for the bank?
What was the capital productivity (in loans per labor dollar) for the bank?
For parts c and d, the bank is considering the purchase of a new computer system for the loan officers. The software will enable each loan officer to process 5.6 loans per day. What is the new labor productivity (in loans per labor hour) for the bank?
What is the labor productivity growth if the software is purchased?
Problem 2: Breakeven, Total Cost and Expected Value Your company plans to release its first new product on December 1 this year. The product will require the company to secure a manufacturing facility that has fixed costs of $40,000 per month and variable costs of $15/unit. The product will be sold for $25 each. Marketing has provided the following demand forecast for December. Demand Level December Units Sold Probability Low Demand 8,000 60% Medium Demand 15,000 30% High Demand 28,000 10%
How many units does your company need to sell in December to break even?
What is the total cost (fixed plus variable) in December if the product has low demand?
What is the expected value of the total cost in December?
Problem 3: Theory of Constraints (6 points) The manufacturing company you work for has a four step assembly process shown in the flow diagram below. Process 1 Capacity = 90 units/hr Process 2 Capacity = 50 units/hr Process 3 Capacity = 70 units/hr Process 4 Capacity = 80 units/hr
What is the maximum output this assembly process could produce in 8 hours?
If the capacity of Process 4 is increased to 90 units/hour, how many units can be assembled in 8 hours?
If the capacity of Process 2 is increased to 90 units/hour, how many units can be assembled in 8 hours?