The operations manager from question above (in the link above) creates an 8 hour shift with a 30 minute lunch and two 10 minute breaks, one in the morning and one in the afternoon. With personal bathroom and other breaks such as stretching, the manager feels the workers actually put in 7 hours of productive time in the shift. The manager uses 3 workers to switch the connectors. After each shift each worker on average produces 58 sets of 20 connectors.
Calculate the utilization, efficiency, and productivity.
Will the owner be satisfied?
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In this question, you are being asked to figure out, in essence, how well the workers at the cable company worked over the course of their entire shift. Did they generally use their time well or were they working more slowly than they should have? Utilization, efficiency, and productivity are all measures that can help us to answer this question.
The first measure is utilization. This measure simply tells us what percentage of the workers’ shift is being used as actual work time. The formula for this is
Utilization = time worked / time available.
In this case, you have said that the workers could potentially have worked 7 hours and 10 minutes (430 minutes) because they have 50 minutes of breaks in an 8-hour shift. You have also said that the manager feels the workers actually worked 7 hours (420 minutes), meaning that there were 10 minutes when they could have been working but were not. Using the formula above:
Utilization = 420/430
The second measure is efficiency. In this measure, we are asking how quickly the workers worked when they were actually working. The formula for this is:
Efficiency = standard time of the work produced/ the time worked in the shift
Note that this is the time actually spent working, not the amount of time available for work.
We can determine the standard time of the work produced by taking the standard time that we calculated in this answer and multiplying it by the number of sets of connecters fixed in the 8-hour shift. This tells us if the workers were working as quickly as they could have been when they were actually working.
To find the standard time of the work produced, we take 7.1 (standard time for a set of connectors) and multiply it by 58 (average number of sets fixed by each worker). 7.1*58 = 411.8.
Using the formula for efficiency:
Efficiency = 411.8/ 420
This tells us that, when the workers were working, they were working at 98% of their capacity.
Finally, we want to measure productivity. The formula for productivity is:
Productivity = standard time of the work produced / time available
In other words, this is the same as the equation for efficiency except that we are now comparing the work done to the entire time that the workers could have been working, not the time that they actually were working.
Using the formula for productivity:
Productivity = 411.8 / 430
This tells us that the workers produced 95.8% of what they could have produced if they had worked at 100% efficiency for 100% of the available time.
In your question you ask if the owner will be satisfied. It is impossible to know because we do not know what standards the owner wants met. We can say, however, that
Utilization = 97.6%
Efficiency = 98%
Productivity = 95.8%
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