Problem of productivity

1. An IPS manufacturing company changes production system from present

system to new system. With present system, the company uses 25 workers,
who can produce on an average 30 and 25 IPS per day of type-1 and type-2
respectively, but on an average 20% manufactured IPS are rejected. Each
worker receives Tk.5000 per month and tools and equipment cost (i.e.,
machine cost for the first system) was Tk.6000 per day. With the new system
the company can produce 50 and 30 IPS per day of type-1 and type-2
respectively. The machine of the new system costs 60 million taka and the
operation life of the machine is 10 years. Five operators are required to
operate the new machine. Wage of each of the operator is Tk.15000 per
month. Price of the type-1 and type-2 IPS is Tk.18000 and Tk.25000 per unit
respectively. Part/material cost is 50% and 60% of the price of type-1 and
type-2 respectively. Consider 25 working days in a month.
a. Compute labor and machine productivity under each system.
b. Compute the overall productivity under each system.
c. Explain what the main factor of this productivity is.
2. BRB cables manufacturing company produces two types of cables from same
raw materials; wire and plastic resins. To produce one meter first type cable
200 gm resin and 0.5 kg wire are required. Whereas, 250 gm resin and 0.8 kg
wire are required to produce one meter of the second type cable. Cost of
resin and wire is Tk.60/Kg and Tk.100/Kg respectively. The company can
produce 75000 meter first type and 50000 meter second type cable per
month by using 200 labors. Each labor receives Tk.400 per day, and
overhead cost is 2 million taka per month. To set up the machine
Tk.60000000 is invested on it. Life of the machine is 10 years. Price of the
first and second type cable is Tk.200/meter and Tk.250/meter respectively.
Consider 25 working days make a month.
a) Compute labor, material, machine, overhead and multi factor
productivity.
b) If production time for every meter of second type cable is double to
that of first type cable then compute overall productivity of 1 st and
2nd type of the cables.

3. A company produces two types of measuring devices. Price of per unit of

the 1st and 2nd type of the device is $10 and & $12 respectively. Material
cost to produce the devices is 40% of their prices. The company used ten
workers, who can produce an average of 30 and 50 devices of 1 st and 2nd
types per day. Workers receive $10 per day and machine and overhead
cost is $120 and $100 per day respectively.
a. Compute labor, material, machine and overhead productivity.
b. Compute the overall productivity.
c. If production time of each 2nd type device is 25% more than that of 1st
type then compute overall productivity of 1 st and 2nd types of the
product.