Operations Management: Productivity Ratios
1. A computer high tech keyboards producer has an automated assembly line. The cost to produce one unit of a these computer keyboards consists of labor ($15); materials ($35); and overhead ($5). The selling price for these CDs is $75 a unit.
A. What is the current total productivity ratio?
B. To achieve 10% gain in total productivity by reducing materials cost only, by what percentage must those costs be reduced?
C. {4 points}. Suppose in the costs and revenues for 2010-1011 for this firm was as follows:
Year......................................2010.......................2011
Revenue.............................$427500....................$513750
Labor...................................$82000......................$91000
Materials.............................$184000....................$100100
Overhead............................$32000.......................$35400
Calculate the productivity ratios AND the percentage change in productivity for each from 2010 to 2011.