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A manufacturing firm has received a contract to assemble 1000 units 78 1-54 A of test equipment in the next year. The firm must decide how to organize its assembly operation. Skilled workers, at $32 per hour each, can individually assemble the test equipment in 2.7 hours per unit. Alternatively, teams of five less-skilled workers (at $22 per hour each) can assemble a unit in 0.8 hours. Which approach is more economical

Sagot :

The final answer is "1,600", and the further calculation and description can be defined as follows:

  • The Index Number Theories approach, which believes that price and quantity data are produced in order to address different difficulties with economic optimization.
  • The "microeconomic approach" is also well recognized.

Given:

[tex]\bold{1,000 }[/tex] assembly units.

  • Skilled employees can put together the testing equipment on a standalone basis in 2.7 hours apiece at $32 per hour.
  • Costs are [tex]\bold{2.7 \times \$ 32 = \$86.4}[/tex] per unit of assembly.
  • The unit can be set up in 0.8 hours by five under-skilled workers (at [tex]\$ 22[/tex] per hour).
  • The unit cost [tex]\bold{= 5 \times 0.8 \times \$ 22 = \$88}[/tex].
  • The cost of [tex]\bold{\$1.6}[/tex] is economic for a team of five under-skilled workers.

Therefore, [tex]\bold{1000 \times 1.6= \$1,600}[/tex] can be saved

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