OMIS 302 Production Management Assignment

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Question 1

Tried and True Clothing has opened four new stores in college towns across the state. Data on monthly sales volume and labor hours are given below. Which store location has the highest labor productivity?


Store Annandale Blacksburg Charlottesville Danville
Sales Volume $40,000 $12,000 $60,000 $25,000
Labour hours 250 60 500 200


Tried and True’s accountant suggests that monthly rent and hourly wage rate also be factored into the productivity calculations. Annandale pays the highest average wage at $6.75 an hour. Blacksburg pays $6.50 an hour, Charlottesville $6, and Danville $5.50. The cost to rent store space is $1800 a month in Annandale, $2000 a month in Blacksburg, $1200 a month in Charlottesville, and $800 a month in Danville.
a. Which store is most productive?
b. Tried and True is not sure it can keep all four stores open. Based on multi factor productivity, which store would you close?


Question 2

Posey Ceramics makes ceramic vases for a chain of department stores. The output and cost figures over the past four weeks are shown here. Labor costs $10 an hour, and materials are $4 a pound. Calculate the

  • (a) labor productivity (in hrs),
  • (b) material productivity (in lbs), and
  • (c) multi factor productivity for each week.


Week 1 2 3 4
Units of output 2000 4000 5000 7000
No of workers 4 4 5 6
Hours/week/worker 40 48 56 70
Material(lbs) 286 570 720 1000