Aggregate Units of Production One possibility is to define aggregate unit as one dollar of output Unfortunately,it is impossible since the selling prices of the various models are not consistent with the number of worker- hours required to produce them. Given amount of dollars of output,we could not know the total WH required. Number of 4.2/285=0.0147WH/S Model Number Worker- Selling Price Sales Rate() Hours 0 A5532 4.2 285 32 K4242 4.9 345 21 5.4/525=0.008WH/S L9898 5.1 395 17 L3800 5.2 425 14 M2624 5.4 525 10 M3880 5.8 725 6
Aggregate Units of Production • One possibility is to define aggregate unit as one dollar of output • Unfortunately, it is impossible since the selling prices of the various models are not consistent with the number of workerhours required to produce them. • Given amount of dollars of output, we could not know the total WH required. Model Numbe r Number of WorkerHours Selling Price Sales Rate(%) A5532 4.2 285 32 K4242 4.9 345 21 L9898 5.1 395 17 L3800 5.2 425 14 M2624 5.4 525 10 M3880 5.8 725 6 4.2/285=0.0147WH/$ 5.4/525=0.008WH/$
Aggregate Units of Production Fact:the percentages of the total number of sales for these six models have been fairly constant Define the aggregate unit of production as a fictitious washing machine requiring.32×4.2+.21×4.9+.17×5.1+.14×5.2+.10 ×5.4+.06×5.8=4.856 hrs of labor time. Problem:Given number of washing machines to be produced, say 10,000,could we know the total WH required? Number of Worker- Model Number Hours Required to Selling Price Sales Rate(%) Produce A5532 4.2 285 32 K4242 4.9 345 21 L9898 5.1 395 17 L3800 5.2 425 14 M2624 5.4 525 10 M3880 5.8 725 6
Aggregate Units of Production • Fact: the percentages of the total number of sales for these six models have been fairly constant • Define the aggregate unit of production as a fictitious washing machine requiring .32 4.2+.21 4.9+.17 5.1+.14 5.2+.10 5.4+.06 5.8=4.856 hrs of labor time. • Problem: Given number of washing machines to be produced, say 10,000, could we know the total WH required? Model Number Number of WorkerHours Required to Produce Selling Price Sales Rate(%) A5532 4.2 285 32 K4242 4.9 345 21 L9898 5.1 395 17 L3800 5.2 425 14 M2624 5.4 525 10 M3880 5.8 725 6