Operations Management: Productivity

Operations Management: Productivity


A grocery chain is considering the installation of a set of 4 self-checkout lanes. The new self-checkout lane setup will replace 2 old cashier lanes that were staffed by a cashier and bagger on each lane. One cashier mans all 4 self-checkouts (answering questions, checking for un-scanned items, taking coupons, etc). Checkout on the new lanes takes 2 minutes (customers bag their own orders) while checkout with the old lanes took only 45 seconds. In addition the electricity costs for both setups are $.05 per checkout while bagging (material) costs are $.10 per checkout with the old system and $.15 for the new system. The new lanes also require $100 in capital costs. Assume that the new lanes ar always in use for 8 hours per day (1 shift) and that a worker makes $10.00/hour. What is the multifactor productivity for each system?