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    Productivity Analysis- Output (and Labor Output) per Hour

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    A local market research firm has just won a contract for several thousand small projects involving data gathering and statistical analysis. In the past, the firm has assigned each project to a single member of its highly trained professional staff. This person would both gather and analyze the data. Using this approach, an experienced person can complete an average of 10 such projects in an eight-hour day.

    The firm's management is thinking of assigning two people to each project in order to allow them to specialize and become more efficient. The process would require the data gatherer to fill out a matrix on the computer, check it, and transmit it to the statistical analysis program for the analyst to complete. Data can be gathered on one project while the analysis is being completed on another, but the analysis must be complete before the statistical analysis program can accept the new data. After some practice, the new process can be completed with a standard time of 20 minutes for the data gathering and 30 minutes for the analysis.

    a. What is the production (output per hour) for each alternative? What is the productivity (output per labor hour)?
    b. How long would it take to complete 1,000 projects with each alternative? What would be the labor content (total number of labor hours) for 1,000 projects for each alternative?

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    Solution Preview

    Please see the attached for analysis.

    Below are some notes/assumptions:
    (1) This assumes total work day of 8 hours
    (2) For option two, because two workers are working, the total hours per day is 16 vs 8 for option one (one worker)
    (3) For option two, produtivity is driven by the analysis and analysis must wait for the data gathering. On the first day, for the first project 20 minutes of the first hour is spent gathering and 30 minutes analyzing. Only one output in that hour, plus 10 extra minutes. After the first ...

    Solution Summary

    This solution analyzes the productivity of two labor options based on staffing. There is an included Excel file that computes output per hour, labor output per hour and labor content.