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Week 1 assignment- ops mgmt

# Week 1 assignment- ops mgmt - Caroline Herring Dr Buddy...

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Caroline Herring Dr. Buddy Bilbrey Operations Management October 2, 2011 Week 1 Assignment Chapter 2 US LDC Sales (units) 100,000 20,000 Labor (hours) 20,000 15,000 Raw materials (currency) \$20,000 FC 20,000 Capital equipment (hours) 60,000 5,000 A. Calculate partial labor and capital productivity figures for the parent and subsidiary. Do the results seem misleading? Labor Productivity Country Units Hours Productivity U.S 100,000 20,000 100,000/20,000 = 5 LDC 20,000 15,000 20,000/15,000 = 1.33 Capital Equipment Productivity Country Units Hours Productivity U.S 100,000 60,000 100,000/60,000 = 1.67 LDC 20,000 5,000 20,000/5,000 = 4 Yes, the results are misleading. B. Compute the multifactor productivity figures for labor and capital together. Are the results better? Country Units Hours Productivity U.S 100,000 20,000+60,000 = 80,000 100,000/80,000 = 1.25 LDC 20,000 15,000+5,000 = 15,000 20,000/20,000 = 1 Yes, results are better because labor and equipment can be exchanged. C. Calculate raw material productivity figures (units/\$ where \$1 = FC 10) Explain why these figures might be greater in the subsidiary

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Country Units Hours Productivity U.S 100,000 \$20,000 100,000/20,000 = 5.00 LDC 20,000 FC \$20,000/10 = \$2,000 20,000/2,000 = 10.00 Raw material is cheaper in LDCs.
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