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Productivity Analysis Exercise

Jon Snow runs a billiard ball manufacturing plant and wants to determine if productivity has increased by the average of 3%. Productivity was calculated for labor, materials, capital, and energy from last year to this year. Labor productivity increased 9.09%, material increased 11.11%, and energy increased 5.28%. Capital productivity decreased 9.10%. Overall productivity increased by an average of 4.095%, so the plant has maintained the 3% target productivity increase.

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Santiago Buladaco
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205 views2 pages

Productivity Analysis Exercise

Jon Snow runs a billiard ball manufacturing plant and wants to determine if productivity has increased by the average of 3%. Productivity was calculated for labor, materials, capital, and energy from last year to this year. Labor productivity increased 9.09%, material increased 11.11%, and energy increased 5.28%. Capital productivity decreased 9.10%. Overall productivity increased by an average of 4.095%, so the plant has maintained the 3% target productivity increase.

Uploaded by

Santiago Buladaco
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Let’s Analyze

ASSIGNMENT EXERCISE 1. Getting acquainted with the computations in the topic productivity.
Now, I will require you to solve the problem given considering the requirements.

PROBLEM: Jon Snow makes billiard balls in his New England plant. With recent increases in his
costs, he has a newfound interest in efficiency. Jon is interested in determining the productivity
of his organization. He would like to know if his organization is maintaining the manufacturing
average of 3% increase in productivity. He has the following data representing a month from
last year and an equivalent month this year.
Last Year Now
Units produced (billiard balls) 1,000 1,000
Labor (hours) 300 275
Resins (pounds) 50 45
Capital interest ($) 10,000 11,000
Energy (BTU) 3,000 2,850

REQUIREMENT (Place your solution for each category per box below):

1. Compute for the productivity of each category (up to 4 decimal point per answer).
Show your solution
For Labor (Hours) For Resins (pounds)

Last Year: 1000/300=3.3333 billiard balls/labor Last Year: 1000/50= 20.0000 billiard balls/pound
hour of resins

Current Year: 1000/275=3.6364 billiard balls/labor Current Year: 1000/45=22.2222 billiard


hour balls/pound of resins

For Capital Interest (Dollars) For Energy (BTU)

Last Year: 1000/10000=0.1000 billiard balls/dollar Last Year: 1000/3000=0.3333 billiard


of the capital interest balls/BTU(Energy)

Current Year: 1000/11000=0.0909 billiard Current Year: 1000/2850=0.3509 billiard


balls/dollar of the capital interest balls/BTU(Energy)
2. Compute for the productivity percentage change for each category (up to 4 decimal point
per answer). Show your solution.
For Labor (Hours) For Resins (Pounds)

Formula=(New Productivity-Old Productivity)/Old Formula=(New Productivity-Old Productivity)/Old


Productivity Productivity

Data: Please refer to #1 answers Data: Please refer to #1 answers

Solution: (3.6364-3.3333)/3.3333=0.0909 or Solution: (22.2222-20.0000)/20.0000=0.1111 or


9.09% change 11.11% change

For Capital Interest (Dollars) For Energy (BTU)


Formula=(New Productivity-Old Productivity)/Old Formula=(New Productivity-Old Productivity)/Old
Productivity Productivity
Data: Please refer to #1 answers Data: Please refer to #1 answers
Solution: (0.0909-0.1000)/0.1000= -0.091 or Solution: (0.3509-0.3333)/0.3333=0.0528 or
-9.10% change 5.28%

Does the organization maintain the manufacturing average of 3% increase inproductivity?


Elaborate your answer.

Yes. Apparently, the organization maintains the manufacturing average of 3% increase in productivity.
Given the data of The New England Plant, there is a clear sign that they are able to boost up their
productivity. A positive 9.09% change in labor, 11.11% change in material and 5.28% change in energy.
In the other hand, the plantation showed a negative change on the capital interest which covered
-9.10% change. But if you will make an average, this will yield a 4.095% increase. That's why they were
able to maintain the 3% increase.

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