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1.13 Charles Lackey operates a bakery in Idaho Falls, Idaho.
Because of its excellent product and excellent location, demand has
increased by 25% in the last year. On far too many occasions, cus-
tomers have not been able to purchase the bread of their choice.
Because of the size of the store, no new ovens can be added. At a
staff meeting, one employee suggested ways to load the ovens differ-
ently so that more loaves of bread can be baked at one time. This new
process will require that the ovens be loaded by hand, requiring addi-
tional manpower. This is the only thing to be changed. If the bakery
makes 1,500 loaves per month with a labor productivity of 2.344
loaves per labor-hour, how many workers will Lackey need to add?
(Hint: Each worker works 160 hours per month.)
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1.14 Refer to Problem 1.13. The pay will be $8 per hour for
employees. Charles Lackey can also improve the yield by purchas-
ing a new blender. The new blender will mean an increase in his
investment. This added investment has a cost of $100 per month, but
he will achieve the same output (an increase to 1,875) as the change
in labor-hours. Which is the better decision?
a) Show the productivity change, in loaves per dollar, with an
increase in labor cost (from 640 to 800 hours).
b) Show the new productivity, in loaves per dollar, with only an
increase in investment ($100 per month more).
c) Show the percent productivity change for labor and investment.
