Norsal, Trondheim

CASE STUDY 2: NorSal, TRONDHEIM

Question 1: In the current situation;

a) Workers' salaries and energy consumption create the inputs.

The total wages paid to workers in a week →7 days×3 shift×8 hours×20 workers×$15 = $50400

Energy cost in a week → 1500 units×$12 = 18000

b) Outcome is constituted by salmon fish.

Weekly produced salmon fish → 1500 pounds of fish×7 days×24 hours = 252000 pounds

In this situation, efficiency is 252000÷(50400+18000)= 3,68

Question 2: If the system were changed,

a) Salaries of employees and energy consumption generated the inputs.

The total wage paid to employees in a week → 7 day×3 shift×8 hour×20 employees×$15= $50400

Energy cost in a week → 750 units×$12 = $9000

Cost of new equipments in a week → $15000

b) Outputs are salmons.

Salmon processing in a week → 2000 pound fish×7 day×24 hour = 336000 pound

In this situation, Productivity = 336000÷(50400+9000+15000) = 4,54

Increase on the Productivity = (4,54-3,68)÷3,68 = 23,36%

Although, in plant 2, cost of new equipments is more than decrease of energy cost, productivity increases by 23,36% because more salmon can be obtained with new system.

Question 3: What if both productivities are equals,

First productivity is 3,68

3,68 = 336000÷(50400+9000+15000+X)

So; X = $16904

X is the new additional expense

The difference that we found as X is the expense to reduce the productivity of plant 2. In other words, X is the amount of money that we save with plant 2 comparing to plant 1. $16904 is the cash we save every unit of production.

Question 4: The precautions could be taken against a rise of the energy cost at the upgraded salmon processing facility in the future,

A(output units)

= Productivity

B(input units)

a) When the energy cost from the input units-B rises, the productivity will not be changed...