A company manufactures particle boards in a production facility. With recent increases in input costs, the...

  

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A company manufactures particle boards in a production facility. With recent increases in input costs, the company has implemented new machines that lower raw material waste and reduce en- ergy consumption. The new machines also have improved automation and therefore lower the labour requirements for the same level of production. The company believes that if a 3% improve- ment productivity (with respect to each input) is achieved it will offset the increased raw material costs. The company calculated the following information Boards produced Labour (hours) Wood chips (kg) Resin (kg) Energy (kWh) Labour cost ($/hour) Wood chips cost ($/kg) Resin (S/kg) Energy (S/kWh) LAST YEAR 10,000 16,000 10,750 500 30,000 20.00 15.15 3.50 0,09 CURRENT YEAR 10,000 15,250 10,150 470 28,500 21.50 15.35 3.55 0.10 a. Evaluate the productivity of boards per each of the four manufacturing inputs (labour, wood chips, resin and energy) for each year. Do the separate measures indicate a 3% improvement? b. Evaluate the same productivity measures as in step (a) but in terms of monetary cost. Is the 3% improvement (for each input) still present? c. Calculate the multi-factor (boards per cost of all inputs) productivity improvement. Is the ultimate goal of offsetting rises in input costs achieved? d. A significant investment was made to acquire the new machines. Engineers believe that further improvements can still be made. In which area (labour use, wood chip or resin waste, energy usage) should the company concentrate future investment towards improvement? A company manufactures particle boards in a production facility. With recent increases in input costs, the company has implemented new machines that lower raw material waste and reduce en- ergy consumption. The new machines also have improved automation and therefore lower the labour requirements for the same level of production. The company believes that if a 3% improve- ment productivity (with respect to each input) is achieved it will offset the increased raw material costs. The company calculated the following information Boards produced Labour (hours) Wood chips (kg) Resin (kg) Energy (kWh) Labour cost ($/hour) Wood chips cost ($/kg) Resin (S/kg) Energy (S/kWh) LAST YEAR 10,000 16,000 10,750 500 30,000 20.00 15.15 3.50 0,09 CURRENT YEAR 10,000 15,250 10,150 470 28,500 21.50 15.35 3.55 0.10 a. Evaluate the productivity of boards per each of the four manufacturing inputs (labour, wood chips, resin and energy) for each year. Do the separate measures indicate a 3% improvement? b. Evaluate the same productivity measures as in step (a) but in terms of monetary cost. Is the 3% improvement (for each input) still present? c. Calculate the multi-factor (boards per cost of all inputs) productivity improvement. Is the ultimate goal of offsetting rises in input costs achieved? d. A significant investment was made to acquire the new machines. Engineers believe that further improvements can still be made. In which area (labour use, wood chip or resin waste, energy usage) should the company concentrate future investment towards improvement?

Answer rating: 100% (QA)

a Last year the company produced 10000 boards with 16000 hours of labor 10750 kg of wood chips 500 k... View the full answer