Answer:
A) Utilization = 70%
Efficiency = 87.5%
B) Utilization = 66.67%
Efficiency = 80%
Explanation:
Determine the utilization and the efficiency for each situations:
A. A loan processing operation that processes an average of 7 loans per day. The operation has a design capacity of 10 loans per day and an effective capacity of 8 loans per day.
Formula for Utilization = Actual Output /
Design Capacity × 100
Actual output = 7 loans per day
Design capacity = 10 loans per day
Utilization = 7/10 × 100
= 70%
Efficiency = Actual output / Effective capacity × 100
Actual output = 7 loans per day
Effective capacity = 8 loans per day
Efficiency = 7/8 × 100
= 87.5%
B. A furnace repair team that services and average of four furnaces a day if the design capacity is six furnaces a day and the effective capacity is five furnaces a day.
Formula for Utilization = Actual Output /
Design Capacity × 100
Actual output = four furnaces a day
Design capacity = six furnaces a day
Utilization = 4/6 × 100
= 66.67%
Efficiency = Actual output / Effective capacity × 100
Actual output = four furnaces a day
Effective capacity = five furnaces a day
Efficiency = 4/5 × 100
= 80%