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batuayan batuayan
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Posts: 675
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6 years ago
An existing insurance application process requires manual keying of three different forms by a team of data entry operators.
 
  The three forms' input times appear in the following table along with the numbers of each type of form anticipated for the coming year. A proposed refinement in the process would reduce the number of forms but make each slightly longer. This would be combined with a search of public records on the World Wide Web as necessary. These times and quantities appear in the lower half of the table. If the labor rate for the data entry operators is the same, which method is preferable?
 
  Form Time to Input
  (minutes) Quantity (forms/year)
  Part A  Existing Method 3 1,200,000
  Part B  Existing Method 3 1,200,000
  Part C  Existing Method 4 1,100,000
   P art A  Proposed Method 4 1,200,000
   Part B  Proposed Method 4 1,200,000
   Web Search  Proposed Method 2 650,000
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wrote...
6 years ago
Annual Labor Cost = (Time to Perform Process)  (Number of Times Performed/Year)
Existing Method
Part A 3 minutes  1,200,000 = 3,600,000
Part B 3 minutes  1,200,00 0 = 3,600,000
Part C 4 minutes  1,100,000 = 4,400,000

Proposed Method
Part A 4 minutes  1,200,000 = 4,800,000
Part B 4 minutes  1,200,000 = 4,800,000
Part C (web) 2 minutes  650,000 = 1,300,000
Total Proposed Process: 10,900,000 minutes - A savings of 700,000 minutes/year
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