Answer:
Output = 600 claims
Input = (18*6*40) + 1200 = $5520
Cost per application = $9.2 is the cost per claim
Productivity ratio = 600 / 5520 = 0.1086
Explanation:
The productivity of the application process = total weekly cost incurred / weekly application output
Here we have average output of 600 application per week
And cost we have,
Total cost = weekly staff cost + weekly cost on computer technology
Weekly staff cost = 40 hours * 6 staff * $18 per hour rate = $ 4,320
Weekly cost on computer technology = $ 1200
Total cost = $4320 + $ 1200 = $5,520
Now productivity = $ 5,520 / 600 application = $ 9.2
Or we can say that it takes $ 9.2 to process one application
(b) Here we have average output of 650 application per week
And cost we have,
Total cost = weekly staff cost + weekly cost on computer technology
Weekly staff cost = 40 hours * 5 staff * $18 per hour rate = $ 3,600 ( assumed that one staff is reduced as one application evaluator is retiring and not replaced)
weekly cost on computer technology = $ 1800
Total cost = $3,600 + $ 1800 = $5,400
Now productivity = $ 5,400 / 650 application = $ 8.31
Or we can say that it takes $ 8.31 to process one application
Percentage change in productivity ={ ($8.31 – $ 9.2 )/ $ 8.31 } * 100 = - 10.71%
Means that the cost has reduced by 10.71 % by the new process
Based on the costs of processing the claims and the average output, the productivity of the application process is 0.1087 claims per dollar.
This can be found as:
= Number of claims / Cost of labor and cost of computer technology
Solving gives:
= 600 / ( (6 employees x 40 hours per week x 18 per hour) + 1,200)
= 600 / 5,520
= 0.1087 claims per dollar
Find out more on productivity at https://brainly.com/question/1151291.
