MGT601

Tutorial 2

1. Identify at least one marketing and one operations functions and discuss how it influences
the competitiveness of an organisation?

2. Differentiate between the following terms:

a. Order qualifiers and Order winners
b. Quality based strategies and time based strategies

3. A manager checked production records and found that a worker produced 160units while
working 40 hours. In the previous week, the same worker produced 138 units while working 36
hours. Did the workers productivity increase, decrease or remain the same? Explain.

4. Compute the multifactor productivity measure for each of the weeks shown for production
of chocolate bars. What do the productivity figures suggest? Assume 40 hour weeks and an
hourly wage of $12. Overhead is 1.5 times weekly labour cost. Material cost is $6 per pound.

Week Output(units) Workers Materials(lbs)

1 30,000 6 450
2 33,600 7 470
3 32,200 7 460
4 35,400 8 480

5. Yesterday, the employees at Stix produced 46 chairs. Of the 46 chairs produced, 12 were
damaged due to a problem with a new sanding machine. The damaged chairs can be
discounted and sold for $25 each. The undamaged chairs are sold to a retail chain for $70 each.
Labor costs were $720, material costs were $460, and overhead costs were $500. What was the
multi-factor productivity?
6. The manager of a crew that installs carpeting has tracked the crews output over the past
several weeks, obtaining these figures:

Week Crew Size Yards Installed

1 4 96
2 3 72
3 4 92
4 2 50
5 3 69
6 2 52
Compute the labour productivity for each of the weeks. On the basis of your calculations, what
can you conclude about crew size and productivity?

7. A milk factory seeks advice from an external consulting company concerning its business and
production processes. The final consulting report describes several steps to increase
productivity including implementation of cutting-edge processing techniques through more
powerful filtering systems.
Existing System Proposed System
Workers 12 9
Milk Output/hour 1,000 gallons 1,400 gallons
Wage Rate/hour $12 $12
Filtration Cost/hour $120 $170

a) Calculate the labor productivity for the existing as well as the proposed system.
b) Find the All-Factor Productivity for both systems.
c) Assume that current processing includes 700 gallons of Grade-A milk sold at $2.40/gallon and
300 gallons of Grade-B milk at $1.90/gallon. Furthermore, assume that under the proposed
system, processing will include 600 gallons of Grade-A milk at $2.40/gallon and 400 gallons of
Grade-B milk at $1.90/gallon. Compare all-factor productivity for both the existing and the new
system.
8. Suzan has a part-time cottage industry producing seasonal plywood yard ornaments for
resale at local craft fairs and bazaars. She currently works a total of 4 hours per day to produce
10 ornaments.
a) What is her productivity?
b) She thinks that by redesigning the ornaments and switching from use of wooden glue to a
hot glue gun she can increase her total production to 20 ornaments per day. What is her new
productivity?
c) What is her percentage increase in productivity?