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WinCo Electric Co produces 1,000 dryer motors each week. WimCo shuts the plant down two weeks each year, so production is only accomplished fifty weeks each year. The manufacturing line equipment costs 250,000 and will remain productive for five years. The annual labor cost is 140,000. Management has the option of acquiring different equipment for 325,000 with an operating life of seven years. Labor costs for the new system would be reduced 17, 500 per year (read this problem very closely. Pay very close attention to the varied time dimension when computing answers. What is the total productivity as measured in units of output per dollar of input over the original five year period. (4 decimal places.)

Operation Management, Management Studies

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