A factory produces 10,000 desk staplers each week. The equipment used costs $50,000 and will remain productive

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A factory produces 10,000 desk staplers each week. The equipment used costs $50,000 and will remain productive for three years. The labor cost per year is $180,000.

a. What is the productivity measure of “units of output per dollar of input” averaged over the three-year period?

b. We have the option of buying $80,000 of new equipment, with an operating life of six years.

It would reduce labor costs to $104,000 per year. Should we consider purchasing this equipment (using productivity arguments alone)?

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Supply Chain Management

ISBN: 9781119392194,9781119392323

2nd Edition

Authors: Nada R. Sanders

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Question Posted: Jan 27, 2024 12:04 PM

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A factory produces 10,000 desk staplers each week. The equipment used costs $50,000 and will remain productive

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a Productivity total units produced divided by the total labor cost plus total ...View the full answer

Supply Chain Management

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