Spring_2008_Practice_Midterm

Spring_2008_Practice_Midterm - Practice Midterm Exam, I.E....

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Practice Midterm Exam, I.E. 1040, Spring 2008 (2084) page 1 1. A manufacturing firm has received a contract to assemble 750 units of test equipment in the next year. The firm must decide how to organize the assembly operation. Skilled workers, at $22.00 per hour each, could be assigned to individually assemble the test equipment. Each worker would do all the assembly steps and the task would take 2.6 hours per unit. An alternative approach would be to set up teams of four less skilled workers, at $13 per hour each, and organize the assembly tasks so each worker does his or her share of the assembly. The four- person team would be able to assemble a unit in 1 hour. Raw material costs are the same under either option. Overhead costs are estimated at 80% of direct labor hours for the single worker option and 85% of direct labor hours for the team option. a. Which approach is more economical? Answer: The teams at a total cost of $72,150 or $96.2 per unit (single worker is $77,220 or $102.96 per unit) b. Other than costs, list at least two other criteria that might affect the firm’s decision. Answer: safety, quality, worker availability, training issues, job satisfaction and motivation (labor issues), productivity, on time delivery, etc.
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This note was uploaded on 06/22/2008 for the course IE 1040 taught by Professor Karenbursic during the Spring '08 term at Pittsburgh.

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Spring_2008_Practice_Midterm - Practice Midterm Exam, I.E....

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