Table 1.2 The Green Battery Company manufactures lithium ion batteries. The current process uses 15 workers...
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Table 1.2 The Green Battery Company manufactures lithium ion batteries. The current process uses 15 workers and produces 50 units per hour. You are considering changing the process with new automated technologies that increase output to 75 units per hour, but will require only 10 workers. Particulars are as follows: CURRENT PROCESS NEW PROCESS OUTPUT (UNITS/HOUR) 50 75 10 NUMBER OF WORKERS MATERIAL COST/HOUR 15 $1000 $1250 Workers are paid at a rate of $15 per hour, and overhead is charged at 150% (or 1.5 times) labor costs. Finished batteries sell for $200/ unit. Use the information provided in Table 1.2. Based on your productivity calculations, what decision should you make? Table 1.2 The Green Battery Company manufactures lithium ion batteries. The current process uses 15 workers and produces 50 units per hour. You are considering changing the process with new automated technologies that increase output to 75 units per hour, but will require only 10 workers. Particulars are as follows: CURRENT PROCESS NEW PROCESS OUTPUT (UNITS/HOUR) 50 75 10 NUMBER OF WORKERS MATERIAL COST/HOUR 15 $1000 $1250 Workers are paid at a rate of $15 per hour, and overhead is charged at 150% (or 1.5 times) labor costs. Finished batteries sell for $200/ unit. Use the information provided in Table 1.2. Based on your productivity calculations, what decision should you make?
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