Mark\'s Ceramics spent $4000 on a new kiln last year in the belief that it would
ID: 451451 • Letter: M
Question
Mark's Ceramics spent $4000 on a new kiln last year in the belief that it would cut energy usage 25% over the old kiln. This kiln is an oven that turns "greenware" into finished pottery. Mark is concerned that the new kiln requires extra labor hours for its operation. Mark wants to check the energy savings of the new oven, and also to look over other measures of their productivity to see if the change really was beneficial. Mark has the following data to work with:
Last Year
This Year
Production (finished units)
4000
4000
Greenware (pounds)
5000
5000
Labor (hrs)
350
375
Capital ($)
15000
19000
Energy (kWh)
3000
2600
Were the modifications beneficial?
Last Year
This Year
Production (finished units)
4000
4000
Greenware (pounds)
5000
5000
Labor (hrs)
350
375
Capital ($)
15000
19000
Energy (kWh)
3000
2600
Explanation / Answer
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
-6.7%
Capital
4000 / 15000 = 0.27
4000 / 19000 = .21
-0.060
-22.2%
Energy
4000 / 3000 = 1.33
4000 / 2600 = 1.54
0.21
15.4%
Resource
Last Year
This Year
Change
Pct. Change
Labor
4000 / 350 = 11.43
4000 / 375 = 10.67
-0.76
-6.7%
Capital
4000 / 15000 = 0.27
4000 / 19000 = .21
-0.060
-22.2%
Energy
4000 / 3000 = 1.33
4000 / 2600 = 1.54
0.21
15.4%