Q1.

Finding the average monthly productivity (units per

hour)

To calculate the monthly productivity averages we need to find the total hours

required for the production of the monthly units and then find the average.

To do that, we need to multiply the Hours per machine column by the number of

machines to get the total hours of machine required for the production and then find

the monthly average by dividing the total hours required by the number of units

produced.

Dimension Jan Feb Mar Apr Total

Units Produced 2300 1800 2800 3000 9900
Hours per Machine 325 200 400 320 1245
Number of Machines 3 5 4 4 3.90*
Total Hours Required 975 1000 1600 1280 4855

Monthly Average (units/hr) 2.36 1.80 1.75 2.34 2.04

* calculated as the average of the monthly machines available

Q5 Partial and Multifactor productivity

To calculate the required productivities, we need to divide the number of units by

the total amount of the required dimension.

US LDC
Sales (units) 100,000 20,000
Labor (hours) 20,000 15,000
Raw material ($) 20,000 2,000
Capital equipment (hours) 60,000 5,000
Labor productivity
5.00 1.33
(units/labor.hr)
Capital Productivity
1.67 4.00
(units/capital.hr)
Capital+ labor productivity 1.25 1.00
Raw material productivity 5.0 10.0
(units/$)

a. Partial labor and capital productivities

The productivity amounts are calculated in the table as per the discussion in the

beginning of the solution. According to the figures, it is clear that the indicators lead

us to contradicting conclusions; according to labor productivity, US seems much

better, according to capital productivity the LDC seems better.

b. Multifactor labor and capital productivity

According to the multifactor productivity, the US facility seems a little bit better than

the LDC. However, this difference isn’t as huge as it is in the partial productivity

indicators as can be seen in the table. This is because the multifactor productivity

indicator balances both figures.

c. Raw material productivity

Finally, raw material productivity is calculated after converting the raw material

amount into US dollars ($) by dividing the FC currency by ten. According to the

numbers, the LDC facility can produce units at 50% the cost of the US facility in

terms of raw material.

Timbuk2 Case

1. What are the key competitive dimensions for messenger and

laptop bags?

Messenger Bags

The main competitive dimensions for the messenger bags are customizability,

various designs, quality and creativity in design.

Laptop Bags

The main competitive dimensions for laptop bags are basically standard designs,

price competition, strength of material and quality of material.

2. Compare the two facilities

Dimension San Francisco China

Volume rate JIT required while maintaining Higher production rates
moderate rates are required
Labor skill Very highly skilled labor is Medium skills required
required
Level of Less More
automation
Raw materials Less inventory High inventory

3.