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A lumber company produces 240 apple crates per 100 logs. The company currently purchases 100 logs per day and each log requires 3 labour hours to process.
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The boss of the company believes that he can hire a professional buyer who can purchase better quality logs at the same cost. These logs will increase his production to 260 crates per 100 logs. His labour hours will also increase by 8 hours per day.
What will be the impact on productivity (measured in crates per labour hour) if the buyer is hired?
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Solution Preview
Compare current and proposed productivity.
Current labour productivity
= 240 crates/ …
