Question

A company used to produce 300 units every day, but 20% of the units were defective. After installing a new process, the defect rate has been reduced to 5%, while output has remained the same. What is the percent increase in productivity due to installing the new process? A. 15.00% B. 0.00% C. 18.75% D. 15.79% E. –75.00%

Answer 1

Answer:

The correct option is C, the increase in productivity is 18.75%

Explanation:

The quantity before installing the new process=(100%-20%)*300

That is 80% of 300units=240units

The quantity after installation is (100%-5%)*300

That is 95% of 300=285units

The increase is 45units(285-240)

Hence  % increase =45/240*100=18.75%

That is 18.75%  increase in production output due to the installation of the new process