Question: how to solve question b? Abudllah Al-Eini operates a kunafe shop in Damascus. Because of its excellent product and excellent location, demand has increased by
Abudllah Al-Eini operates a kunafe shop in Damascus. Because of its excellent product and excellent location, demand has increased by 35% in the last year. On far too many occasions, customers have not been able to purchase the kunafe of their choice. Because of the size of the store, no new equipment can be added. At a staff meeting, one employee suggested ways to load the kunafe trays differently so that more kunafe can be made at one time. This new process will require that the trays be loaded by hand, requiring additional manpower. This is the only thing to be changed. The shop currently makes 1,600 trays per month. The pay will be $8 per hour for employees and each employee works 160 hours per month. Abdullah can also improve the yield by purchasing a new oven. The new oven will mean an increase in his investment. This added investment has a cost of $125 per month, but he will achieve the same new output (an increase to 2,160.00 ) as the change in labor hours. a) Current productivity for 640 work hours = trays/dollar (round your response to three decimal places). If Abdullah chooses to increase the number of work hours to 864 in order to employ the new tray loading technique, then the productivity is = trays/dollar (round your response to three decimal places). b) If Abdullah instead chooses to purchase a new oven (while holding labor constant at 640 hours at $8 per hour), then the productivity is = trays/dollar (round your response to three decimal places)
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