The existing incentive system of a certain factory is, Normal working week
The existing incentive system of a certain factory is, Normal working week: 5 days of 9 hours each plus 3 late shifts of 3 hours each Rate of payment: Day work – Rs.10 per hour, late shift – Rs.15 per hourAdditional hours payable: Rs.25 per day shift, Rs.15 per late shift Average output per operative for 54 hours week, i.e. including 3 late shifts: 120 articles In order to increase output and eliminate overtime it was decided to switch on to a system of payment by results. The following information is obtained.Time rate [as usual] Rs.10 per hourBasic time allowed for 15 articles: 5 hoursPiecework rate: Add 20% to pricePremium bonus: Add 50% to timeYou are required to work out,[I] Hours worked[II] Weekly earnings[III] Number of articles produced and[IV] Labor cost per article for an operative under the following systemsExisting time rateStraight piece rateRowan planHalsey planAssume that 135 articles are produced in a 45 hours week under straight piece rate, Rowan plan and Halsey plan. The additional bonus under the existing system will be discontinued in the proposed incentive scheme.
