Question

In: Operations Management

A hamburger factory produces 8,500 hamburgers each week. Assume there are 50 working weeks per year....

A hamburger factory produces 8,500 hamburgers each week. Assume there are 50 working weeks per year. The equipment used for making hamburgers costs $50,000 and will remain productive for 5 years. The factory has 10 employees and the average monthly salary is $4,000 per person. The average utility cost for the factory is $5,000 per month.

Note:

Solution inputs are numbers only, no symbols or letters such as "$, dollar".
Numbers can be in the format of either 3000 or 3,000; 0.95 or .95
Keep two decimals, do not round up. For example, 3.24923 will be kept as 3.24

What is the factory's hamburger output per year?
What is the factory's labor cost per year?
What is the factory's equipment cost per year?
What is the factory's labor productivity (hamburger/$)?
What is the factory's multi-factor productivity, in terms of equipment and utility?
What is the factory's total productivity?

Bear Lake Seafood produces 550 boxes of seafood per day. There are three working shifts, each is 6-hour. The company employs 4 workers for each shift, and pays each worker $10 per hour. The utility cost for the company is $30 per working hour (no utility cost when the company is not in operation).

Note:

Solution inputs are numbers only, no symbols or letters such as "$, dollar".
Numbers can be in the format of either 3000 or 3,000; 0.95 or .95
Keep two decimals, do not round up. For example, 3.24923 will be kept as 3.24

What is the labor cost per day for the seafood company?
What is utility cost per day for the seafood company?
What is the utility productivity for the seafood company?
What is the total productivity for the seafood company?

Expert Solution

***Final answers as bold italic

What is the factory's hamburger output per year?

8500 per week and 50 weeks a year

= 8500*50 = 425000

What is the factory's labor cost per year?

Average monthly salary is $4000 per person

Per person annual salary = 4000*12 = $48000

Number of workers = 10

Hence total salary = 480000

What is the factory's equipment cost per year?

Equipment costs $50,000

Useful life = 5 years

Hence cost per year = 10000

What is the factory's labor productivity (hamburger/$)?

Per year labor cost = $480000

Per year hamburger produced = 425000

Hence labor productivity = total hamburgers/total labor cost = 425000/480000 = 0.88 hamburgers per $

What is the factory's multi-factor productivity, in terms of equipment and utility?

Per year equipment cost = $10000

Per year utility = 5000*12 = $60,000

Total cost = $70,000

Total output = 425000

Hence productivity = 425000/70000 = 6.07 hamburgers per $

What is the factory's total productivity?

Total cost = equipment + utility + labor = 480000 + 70000 = 550000

Output = 425000 hamburgers

Productivity = 425000/550000 = 0.77 hamburgers per dollar

Question – 2:

What is the labor cost per day for the seafood company?

Per day 3 shifts of 6 hours = 18 hours work

4 workers in each shift. Means 18*4 working labor hours = 72 labor hours

$10 per hour

Hence per day labor cost = $720

What is utility cost per day for the seafood company?

Utility cost per hour = $30

Per day working hours = 18

Hence total utility cost per day = 18*30 = $540

What is the utility productivity for the seafood company?

Daily utility cost = $540

Daily production = 550 boxes

Hence productivity = 550/540 = 1.01 boxes per dollar

What is the total productivity for the seafood company?

Per day total cost = total labor + utility = 540 + 720 = 1260

Total output = 550 boxes

Productivity = 550/1260 = 0.43 boxes per dollar

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