## Interactive TeacherGuide The Workday That Wouldn't Die

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 MATH

Duplicate and distribute these activities. Students may work independently or cooperatively.

Management consultant Ron Healy is a proponent of the 30/40 work plan, which he believes increases productivity. How does he go about deciding whether 30/40 will work for a company? Try this scenario:

Pretend you are a consultant hired to make a company more productive. Here is the data you receive about the company.

The company makes shoes. They make a \$15 gross profit on every pair of shoes that a worker produces. They employ 50 workers, who each make \$12 an hour. The average worker works 40 regular and 20 overtime hours a week and produces 100 pairs of shoes in that time.

Roughly how much profit does the company make per week? (Use only the data given to make your answer. Assume that overtime hours are paid at time-and-a-half—150% of normal hourly pay.)

• Now think: In order for the company to profit equally using the 30/40 plan, how many pairs of shoes would each worker have to produce per hour during their 30 hours of work? Remember to take into account that workers are being

Would 30/40 be a good idea for this company? Offer a written analysis of the situation. Remember to present these facts:

The computations on the situation above don't take into account the loss of productivity caused by worker turnover.

Workers typically are happier and more willing to stay with a company on the 30/40 plan.

Do the figures add up? Sample Worksheet
Each worker works 60 hours a week. Each worker produces 100 pairs of shoes a week. So, each worker produces 1.67 pairs of shoes per hour. (100 pairs of shoes per week ¸ 60 hours per week.)

Each worker works and gets paid for 40 regular hours each week.

At \$12/hr., that is \$480/wk.

Each worker works and gets paid for 20 overtime hours each week.

At \$18/hr., that is \$360/wk.

So, each worker is paid \$840/wk.

That amount times 50 workers is \$42,000/wk.

The workers each produce 100 pairs of shoes a week.

That amount times 50 workers is 5,000 pairs of shoes.

Each pair of shoes yields \$15 gross profit.

So, on 5,000 pairs of shoes the company makes \$75,000

Subtract labor cost from above - \$42,000

That leaves a net profit of \$33,000

30/40 Plan

Each worker gets paid for 40 regular hours each week

At \$12/hr., that is \$480/wk.

That amount times 50 workers is the labor expense, which is \$24,000/wk.

Net profit to be matched is \$33,000/wk.

So, for the plan to work, the company must have gross profit of \$57,000/wk.

Each pair of shoes yields \$15 gross profit.

So to earn a gross profit of \$57,000, the company must make 3,800 pairs of shoes
(\$57,000 ¸ \$15 = 3,800)

Each worker works 30 hours a week.

That amount times 50 workers is 1,500 hrs/wk.

In order to produce 3,800 pairs of shoes in 1,500 hours, each worker must average 2.53 pairs of shoes per hour. (3,800 ¸ 1,500)

So, the hourly output of shoes per worker must increase from 1.67 pairs to 2.53 pairs for the 30/40 plan to yield the same profit as the current operation.