Mark's Ceramics Spent $4000 on a New Kiln Last Year

question 71

Essay

Mark's Ceramics spent $4000 on a new kiln last year in the belief that it would cut energy usage 25% over the old kiln. This kiln is an oven that turns "greenware" into finished pottery. Mark is concerned that the new kiln requires extra labor hours for its operation. Mark wants to check the energy savings of the new oven, and also to look over other measures of their productivity to see if the change really was beneficial. Mark has the following data to work with:
$$\begin{array} { | l | l | l | } \hline & \text { Last Year } & \text { This Year } \\\hline \text { Production (finished units) } & 4000 & 4000 \\\hline \text { Greenware (pounds) } & 5000 & 5000 \\\hline \text { Labor (hrs) } & 350 & 375 \\\hline \text { Capital (\$) } & 15000 & 19000 \\\hline \text { Energy (kWh) } & 3000 & 2600 \\\hline\end{array}$$
Were the modifications beneficial?

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Definitions:

GDP

Gross Domestic Product, a measure of a country's economic performance, representing the total value of all goods and services produced over a specific time period.

Foreign Corrupt Practices Act

A United States law aimed at preventing American companies from engaging in bribery and other unethical practices in foreign countries to obtain or retain business.

Facilitation Payments

These are small sums of money paid to expedite or secure the performance of routine governmental actions by officials, often viewed as a form of bribery in many jurisdictions.

Cultural Differences

Variations in the norms, values, beliefs, and practices among different groups, societies, or individuals, arising from ethnic, racial, socioeconomic, geographical, or other distinctions.