Question

For the previous month, the Bichsel Lounge served 1,500 customers with very few complaints. Their labor cost was $3,000; material cost was $800; energy cost was $200; and building lease cost was $1,500. They were open 26 days during the month, and the lounge has 20 seats. They are open six hours per day, and the average customer stay is one hour.

Required:
a. Calculate the single-factor productivities and the overall multiple-factor productivity. How could they improve the productivity?
b. Calculate the monthly capacity and the capacity utilization.

Answer 1

Based on the number of customers, the and the various costs, the single-factor productivities and monthly capacity are:

• Labor productivity - 0.5.
• Material productivity - 1.88.
• Monthly capacity - 3,120 customers per month.
• Capacity utilization - 48%.

What is the labor productivity?

This can be found as:

= Number of customers / Labor cost

= 1,500 / 3,000

= 0.5

What is the material productivity?

= 1,500 / 800

= 1.88

What is the monthly capacity?

= (Number of seats x Days in a month x Hours in a day) / Customer times

= (20 x 26 x 6) / 1

= 3,120 customers per month

What is the capacity utilization?

= No. of customers / Monthly capacity

= 1,500 / 3,120

= 48%

Find out more on factor productivity at https://brainly.com/question/13214575.

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