Please read the case and answer the following questions below. I am providing power point slides from the chapter 9 and the instructor’s manual from a earlier edition to help answer the questions. The instructors manual points out what the instructor is looking for. you do not have to show calculations.
You run Tricky Nicky’s Carpet Cleaning Co., which cleans carpets for businesses. On average, one carpet cleaner can clean six offices per eight-hour shift. Currently, 100 cleaners work for you, and they work 250 days per year. Supervisors inspect carpets when cleaners notify them that the carpet is done. Because of Nicky’s “Satisfaction Guarantee,” when a carpet does not meet the standard, it is redone immediately at no extra cost to the client. A recent analysis of the rework required found that, on average, one in every six carpets cleaned does not meet Nicky’s standards.
The profit averages $20 a cleaning. You pay your cleaners $15 per hour. When you re-clean a carpet, it is done on overtime and you lose, on average, $20 in labor costs. On average, your profit is gone. In addition, there is an average cost of materials and equipment of $2.00 per office.
Your training manager conducted a needs assessment regarding this issue at your request. He reported that half the employees are not reaching the standard one in nine times, and the other half are not meeting the standard two in nine times, for an overall average of one in six [(1/9 1 2/9)/2 = 1/6]. The needs assessment also indicated that the cause was a lack of KSAs in both cases.
The training manager proposes a training program that he estimates will reduce everyone’s errors to 1 carpet in 12 (half the current level). The training would take four hours and could handle 20 employees per session.
The following costs reflect delivery of five training sessions of 20 employees each and assume 250 working days in a year.
|20 days of training manager’s time for design and development at $40,000 per year||$ 3,200|
|4 hours per session at $40,000 per year (trainer)||$ 400|
|Training facility and equipment||$ 500|
|Employee salaries at $20 per hour per employee (Nicky decides to do training on a Saturday and pay employees an extra $5 per hour as overtime)||$ 8,000|
|Lost profit (none because training is done on overtime)||0|
|Evaluation of training; 10 days of training manager’s time at $40,000 per year||$ 1,600|
|Material and equipment||$ 600|
|Clerical support—20 hours at $10 per hour||$ 200|
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