Mark's Ceramics spent $4000 on a new kiln last year in the belief that it would cut annual energy usage 25% over the old kiln. This kiln is an oven that turns "greenware" into finished pottery
Mark is concerned that the new kiln requires extra labor hours for its operation. Mark wants to check the energy savings of the new oven, and also to look over other measures of their productivity to see if the change really was beneficial. Mark has the following data to work with:
Last Year This Year
Production (finished units) 4000 4000
Greenware (pounds) 5000 5000
Labor (hrs) 350 375
Capital ($) 15000 19000
Energy (kWh) 3000 2600
Were the modifications beneficial?
The energy modifications did not generate the expected energy savings; also, labor and capital productivity decreased.
Resource Last Year This Year Change Pct. Change
Labor 4000 / 350 = 11.43 4000 / 375 = 10.67 -0.76 -6.65%
Capital 4000 / 15000 = 0.27 4000 / 19000 = .21 -0.060 -22.22%
Energy 4000 / 3000 = 1.33 4000 / 2600 = 1.54 0.21 15.79%
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