Mitmomu

Group 1 - EMC1

Adolfo, Karl

Almeda, Sam

Antonio, Chuckie

Carlos, Jessica

CASE STUDY 1: Norwegian Salmon Processing Facility, Trondheim

I. CASE BACKGROUND

NorSal Trondheim operates a salmon processing facility where the purchase fish from local sources along the North Sea, processed at the facility, and sold to customers for distribution. Inger Hansen, the plant manager, wants to upgrade the technology in the plant. The modernizing of equipment will increase the capacity per hour for them to cover the additional demands. Currently the plant operates five days a week, two shifts with 30 workers per shift at $10 per hour. It is not possible for adding a third shift since the times is allotted for the cleaning of the facility.

The old equipment produces 1,500 pounds of salmon per hour, while the new equipment can produce 2,000 pounds per hour. Though the production manager, Bjorn Person is hesitating for the plan modernization because the older equipment has been paid for, and the new equipment will cost them $10,000 per week. The controller, Maret Karlsen takes into consideration that energy consumption must be taken into analysis as well. The current equipment consumes 1,000 units of energy per week at $10 per unit. On the other hand, the new equipment will cut down the cost of energy by 50%.

II. QUESTIONS

1. What is the productivity of the processing facility, with the equipment currently in use?

Equations:

Labor Productivity = Units Produced

Labor-hours used

Multifactor Productivity = Output

Labor + Material + Energy + Capital + Miscellaneous

P= 1,500 lbs/hr

(8hrs/shift) x (2 shifts/day) x (30 workers) x (5 days)

P= 1,500 lbs/hr

2,400 labor-hours

P= 0.625 lbs/hr

P= 1,500 lbs/hr

$24,000 (Labor Cost) + $10,000 (Energy Cost)

P= 0.044 lbs per dollar

2. What would the productivity of the plant become if the new system were purchased and implemented?

P= 2,000 lbs/hr

(8hrs/shift) x (2...