business math

Evaluate a company that has personal issues that must be resolved. Read the following
scenario to evaluate Taylor Inc. operations-management processes to help them maximize
labor productivity. Management for Taylor Inc. would also like you to suggest alternative
management techniques to improve productivity.
Taylor Inc. manufactures widgets. There is a particular assembly line for Widget X. This
assembly line includes the assembly of various raw materials, subassemblies, and
packing of the finished widget. Currently, approximately 27% of the total labor time is
utilized in walking by assembly line personnel to obtain the needed parts required to
accomplish their assigned tasks. The average hourly cost, including all benefits, is $43
per hour. Seventeen people are required on the assembly line. Lifting containers that
weigh approximately 42 pounds is required in several of the respective tasks. The current
output of finished widgets is 208 per 8-hour shift. The company incurs an average of four
worker’s compensation claims per year in back injuries due to lifting. An average claim
equals $109,000 and the employee is out for an average of 280 hours. The injured
worker must be replaced to sustain production. By improving the physical layout,
productivity may be improved and worker’s comp claims reduced. Two layouts have been
proposed.

Alternative One reduces wasted motion (walking) to 1% of total labor used on the
assembly line. Physical lifting is reduced to no more then 12 pounds. Six people will be
required on the assembly line. Productivity in finished goods per 8-hour shift will increase
to 392. It is anticipated that worker’s comp claims will be reduced to .3 per year; however,
a capital investment of $1.3 million is required in robotics and mobile storage carts.
Useful life of the equipment is 7 years.

Alternative Two reduces wasted motion to 7% of total labor time while physical lifting is
reduced to no more then 23 pounds. Nine people are required to staff the assembly line.
Productivity will be 288 widgets per 8-shift. Worker’s comp claims are estimated at 1.9
per year. Capital investments are $967,000 with a useful life of 5 years for the equipment.

• Write a 350- to 500-word executive summary that provides justification for the particular
alternative you select. As part of your justification, provide
o a cost-benefit matrix that compares the alternatives.
o the effects the alternative will have on productivity.
o possible benefits of using a network strategy to streamline operational
procedures.
Note. The lowest cost alternative may not be the best alternative.

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