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

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01-09-2021
Business

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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

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codiepienagoya codiepienagoya · Answer 1 · 2021-09-06T02:17:55-04:00

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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