MECHANICAL ENGINEERING DEPARTMENT

Course No. UME515 Course Title: Industrial Engineering

Tutorial No. 3

Productivity Management

(Time: 01 hour)

1. Singh Plastics Limited manufactures plastic moulded parts and sells them by weight. The

company produces 160 kg of plastic moulded parts of acceptable quality in a particular time

period by consuming 200 kg of raw material. For the next period (say, second period), the

output is 320 kg by consuming 420 kg of raw material. For the third period, the output is

increased to 400 kg by consuming 400 kg of raw material. The raw material price is 10/kg

and the company sells the artifacts at 20/kg. Compare the productivity of this firm for the

given three periods.

2. A company produces 10,000 units of products in a given period of time and sells them at 10

per unit. It took 500 labour hours at a labour rate of 09/h to produce the output. The cost of

raw material and purchased components/sub-assemblies is 5000/- and 25000/- respectively.

Find the labour productivity.

3. The following data (see Table 1) refers to the firms performance for two different periods.

Compute the total productivity and partial productivity indices for the manufacturing firm for

the two periods.

Page 01 of 02
Table 1. Data pertaining to inputs and output for Problem No.3.

OUTPUT PERIOD 1 PERIOD 2

1. Finished goods produced (units) 2500 2200
2. Work in process (WIP) 1200 1600
Percentage of completion (%) 60 50
Price per unit of finished product () 1000 1200

3. Dividens from securities () 12000 15000

Deflator for this item 1 1.11
INPUTS
1. Skilled labour (h) 10000 12000
Wage Rate (/h) 60 70
2. Unskilled Labour (h) 5000 8000
Wage Rate (/h) 30 40
3. Materials (tonnes) 20 18
Price per tonne (/tonne) 1200 1600
4. Total plant hours worked (h) 1800 2400
Plant hour rate (/h) 650 650
5. Energy
Oil used in litres (at price) 5000 (4/L) 3000 (6/L)
Coal used in tonnes (at price) 200 (1200/tonne) 150 (1800/tonne)
Electricity used in kWh (at price) 15000 (02.5/kWh) 18000 (03.2/kWh)
6. Others
Consulting fee () 20,000 ---
Information expense () 10,000 15,000
Deflator for this item 1 1.2

Page 02 of 02