The CSR Bakery on campus produces and excellent bread. Currently, they produce 6,000 loaves per
month with a labor productivity of 5.0 loaves per labor-hour. However, they want to increase their output
by 30% because students have not been able to purchase the bread of their choice. Because of the size of
the space, no new ovens can be added.
At a staff meeting, one of the work-study students (from the Huether School) suggested a way to load the
oven differently so that more loaves of bread can be baked at one time. This new process will require that
the ovens be loaded by hand, requiring additional labor. They could achieve the 30% increase with the
additional labor, but the labor productivity would be unchanged.
If the bakery chose this option, how many work-study students will CSR need to add? (Assume
each work-study student works 60 hours per month.)
A second alternative is to keep the labor hours constant but add an automated kneading machine. The
current labor and the additional automation would also improve the yield by 30%. Work-study students
are paid $16 per hour. The new kneading machine will increase costs by $4000 per month.
Since both alternatives achieve the desired production increase, which alternative would you choose
based on YOUR ANALYSIS OF PRODUCTIVITY? Why?