Question

An operation has a 20 percent scrap rate. As a result, 80 pieces per hour are produced. What is the potential labor productivity that could be achieved by eliminating the scrap?

Answer 1

Answer:

25%

Explanation:

If there is 20% scrap, then

80% of (production + scrap) = 72 pcs/hr

Now,

$\frac{80}{100} \times (72+scrap)= 72 pcs/hr\\0.80\times (72+Scrap) = 72 \\ 72+Scrap = \frac{72}{0.80}\\72 + Scrap = 90\\Scrap = 18 pcs /hr$

The percent increase in labor productivity is, $\frac{18}{72} =0.25$.

Or it can be written as  25% of  which would give 80 pieces per hour.