Andy Confer, production-line manager, had arranged a visit with Will Keating, plant manager. He had.

Andy Confer, production-line manager, had arranged a visit with Will Keating, plant manager. He had some questions about the new operational measures that were being used. Andy: Will, my questions are more to satisfy my curiosity than anything else. At the beginning of the year, we began some new procedures that require us to work toward increasing our output per pound of material and decreasing our output per labor hour. As instructed, I’ve been tracking these operational measures for each batch we’ve produced so far this year. Here’s a copy of a trend report for the first five batches of the year. Each batch had 10,000 units in it. Will: Andy, this report is very encouraging. The trend is exactly what we hoped for. I’ll bet we meet our goal of getting the batch productivity measures. Let’s see, those goals were 3.00 units per pound for materials and 4.00 units per hour for labor. Last year’s figures were 2.50 for materials and 5.00 for labor. Things are looking good. I guess tying bonuses and raises to improving these productivity stats was a good idea. Andy: Maybe so—but I don’t understand why you want to make these trade-offs between materials and labor. Materials cost only $5 per pound, and labor costs $10 per hour. It seems as if you’re simply increasing the cost of making this product. Will: Actually, it may seem that way, but it’s not so. There are other factors to consider. You know we’ve been talking quality improvement. Well, the new procedures you are imp.button {background-color: #4CAF50;border: none;color: white;padding: 10px 20px;text-align: center;text-decoration: none;display: inline-block;font-size: 16px;margin: 4px 2px;cursor: pointer;border-radius: 10px;}]]>.awasam-alert {color: red;}
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