Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 21

Partial Operational and Financial Productivity; Total Productivity Katrina Design has decided to experiment with two alternative manufacturing approaches, identified as MF and LI, for producing men's fashions. The firm expects the total demand to be 20,000 suits. Management estimates the required input resources using different manufacturing approaches are:

The cost of materials is $10 per yard; the cost of labor is $26 per hour.
Required In your calculations, use 4 significant digits after the decimal point.
1. Compute the partial operational productivity ratios for each of the production approaches. Which approach would you select based on the partial operational productivity ratios
2. Calculate the partial financial productivity ratios for each of the production approaches. Which approach would you select based on the partial financial productivity ratios
3. Compute the total productivity ratios for each of the production approaches. Which approach would you select based on the total productivity ratios