HRM – Math- Problem

HRM – Math- Problem

Problem-01: Mr. Nasir is an employee of Squire Textile ltd. His monthly salary is Tk. 25000.00. He was absent 20 days out of 260 work days in the financial year 2012. What is his absence rate and wages lost in the year of 2012? Make comment about absence rate.

Solution: given that

            Monthly salary              = tk. 25000.00,          yearly salary  =tk. 300000.00

            Absence                        =  20 days

            Working days in a year = 260 days

1.      Absence rate = (20/ 260 )100 = 7.69%

An absence rate is higher than 5% is considered high.

2.      If absence rate is 7.69 %, this represents tk. 230700 in lost wages assuming a 260 working day year.

Problem-02: Mr. Abdullah is an employee of DBBL. His monthly salary is Tk. 30000.00. He was absent 40 hours out of 260 work days in the financial year 2012. What is his absence rate and wages lost in the year of 2012? Make comment about absence rate.

Solution: given that

            Monthly salary              = tk. 30000.00,          yearly =tk. 360000.00

            Absence                        = 40   hours or 5 days

            Working days in a year = 260 days

1.      Absence rate = (05/ 260 )100 = 1.92%

An absence rate is lower than 5% is considered low.

2.      If absence rate is 1.92 %, this represents tk. 6912 in lost wages assuming a 260 working day year.

Problem-03: Manarat International University hires 7 faculties for different department. For hiring the faculties the university had to expenses agency fees, Advertising Costs, Employee Referral Costs, Travel Expenses, Relocation Expenses and Total Recruiter and Administration Costs irrespectively 10000.00, 120000.00, 12000.00, 4000.00, 15000.00 and 20000.00. Total Recruiter and Administration Costs may be considered as 10 % for this recruitment. What is the cost per hire?

Solution:

CPH = {AC + AF + ERC + TE + RE + (TRAC * 0.1) }/ Number of hire
Where:

CPH	=	Cost Per Hire
AC	=	Agency Fees=tk. 10000.00
AF	=	Advertising Costs= tk. 120000.00
ERC	=	Employee Referral Costs= tk. 12000.00
TE	=	Travel Expenses=tk. 4000.00
RE	=	Relocation Expenses=tk. 15000.00
TRAC	=	Total Recruiter and Administration Costs = tk. 20000 * .1=tk. 2000

CPH ={AC + AF + ERC + TE + RE + (TRAC * 0.1) }/ Number of hire
            = (10000+120000+12000+4000+15000+2000)/07=  tk. 23285.71

 Problem-04: Manarat International University hires 7 faculties and 8 staffs for different department. For hiring the faculties and staffs the university had to expenses agency fees, Advertising Costs, Employee Referral Costs, Travel Expenses, Relocation Expenses and Total Recruiter and Administration Costs irrespectively 10000.00, 120000.00, 12000.00, 4000.00, 15000.00 and 20000.00. Total Recruiter and Administration Costs may be considered as 10 % for this hire. What is the cost per hire?

Solution:

CPH = {AC + AF + ERC + TE + RE + (TRAC * 0.1)}/ Number of hire
Where:

CPH	=	Cost Per Hire
AC	=	Agency Fees=tk. 10000.00
AF	=	Advertising Costs= tk. 120000.00
ERC	=	Employee Referral Costs= tk. 12000.00
TE	=	Travel Expenses=tk. 4000.00
RE	=	Relocation Expenses=tk. 15000.00
TRAC	=	Total Recruiter and Administration Costs = tk. 20000 * .1=tk. 2000

CPH = {AC + AF + ERC + TE + RE + (TRAC * 0.1)}/ Number of hire
            = (10000+120000+12000+4000+15000+2000)/15= tk. 10866.67

Problem 05:  An organization wants to quit 5 employees.  For this the organization arranged an interview for the exiting employees. Organization invites 3 interviewers for 2 hours to take transparent interview to measure their qualification. Some costs are involved to arrange this separation process:

·         Wages of the interviewers Tk. 2500.00 per hour.

·         Wages of the exiting per employee is 500 per hour. 

·         Severance package per employee is 50000.00

·         Administrative functions related to the Exiting per employee 3000.00 per hour.

·         Unemployment Compensation 60000.00 per employee.

What is the cost of separation processing?

Solution:

Separation Processing
	Exit Interview
		·         Hours  X Wage of Inteviewer $	=	$
		·         Hours  X Wage of Exiting Employees $	=	$
	Severance Package  (If the employee is terminated)
		·         $ (varies by company)	=	$
	Administrative functions related to the Exiting Employee
		·         Hours  X Wage of Administrative Support $	=	$
	Unemployment Compensation  (if applicable)
		·         $ (Varies by State)	=	$
	Total Cost of Separation Processing		=	$

Problem 06:  An organization wants to quit 5 employees.  For this the organization arranged an interview for the exiting employees. Organization invites 3 interviewers for 2 hours to take transparent interview to measure their qualification. The organization also invites 2 trainers for 2 hours for 3 temp training and manages 2 workers for three hours overtime. Some costs are involved to arrange this process:

·         Wages of the interviewers Tk. 2500.00 per hour.

·         Wages of the exiting per employee is tk. 500 per hour. 

·         Severance package per employee is tk. 50000.00

·         Administrative functions related to the Exiting per employee tk. 3000.00 per hour.

·         Unemployment Compensation 60000.00 per employee.

·         Wages of per trainer tk. 2000.00 per hour.

·         Wages of per temp 500.00 per hour.

·         Wages of overtime 400.00 per hour

Requirements:

1.      What is the cost of separation processing?

2.      What is the cost of covering vacancy gap?

Solution:

Separation Processing
	Exit Interview
		·         Hours  X Wage of Inteviewer $	=	$
		·         Hours  X Wage of Exiting Employees $	=	$
	Severance Package  (If the employee is terminated)
		·         $ (varies by company)	=	$
	Administrative functions related to the Exiting Employee
		·         Hours  X Wage of Administrative Support $	=	$
	Unemployment Compensation  (if applicable)
		·         $ (Varies by State)	=	$
	Total Cost of Separation Processing		=	$

Vacancy
Orientation of Temporary Help
	·         Hours  X Wage of Trainer $	=	$
	·         Hours  X Wage of Temp $	=	$
Coworker burdens  (overtime, added shifts, etc)
	·         Hours  X Wage of Coworker $	=	$
Total Cost of Covering Vacancy Gap		=	$

Problem 07:  An organization quit 5 employees and decided to replace it by new hiring. 50 applicant apply for the job.  For this the organization arranged different types of test and interview for hiring new employees. Organization invites 2 tester and 3 interviewers for 2 hours. Some costs are involved to arrange this process:

·         Cost of developing advertisement Tk. 2500.00.

·         Cost of newspaper advertisement tk. 1, 50,000. 

·         Cost of screening application  tk. 5000.00

·         Wages of per interviewer tk. 2000.00.

·         Wages of per participants for hiring decision meeting 3000.00. ( present 5 participants)

·         Cost of reference check tk. 2000.00.

·         Cost of background check per applicant 100.00.

·         Cost of per tester tk. 2000.00.

·         Cost of test for per applicant 500.00  

Requirements:

·         What is the cost of replacement hiring?

Replacement Hiring
Development of Advertisement
	·         Hours  X Wage of Developer $	=	$
Cost of the Advertisement
	·         # of Ads for this position  X Cost of 1 Ad $	=	$
Headhunter (executive searcher)
	·         15% X New Hire’s Annual Salary $ (15% is an avg. percentage charged by headhunters)	=	$
Screening Applicants
	·         Hours  X Wage of Screener $	=	$
Interviewing Applicants
	·         Hours  X Wage of Interviewer $	=	$
Hiring Decision Meeting
	·         Hours  X Avg. Wage of Participants $ X # of Participants	=	$
Background Check
	·         Hours  X Wage of Reference Checker $	=	$
	·         # of Applicants for the position  X Cost of Background Check $ (The average cost of a background check into an applicant's criminal, education, employment and driving history was $45 in 2002.)	=	$
Testing  (Aptitude, Drug, Personality)
	·         Hours  X Wage of Tester $	=	$
	·         # of Applicants for the position  X Cost of a Test $	=	$
Total Cost of Replacement Hiring		=	$

Problem 08: Manarat International University hires 7 faculties for different department and decided to train new faculties.  For this the organization arrange an orientation and on the job training program also invites 2 trainers for orientation and 3 trainers for on the job tainting for 2 hours. Some costs are involved to arrange this process:

·         Administrative cost related to the new employees for training 5000.00

·         Wages of per trainer for orientation tk. 2000.00.

·         Wages of per trainee for orientation tk. 500.00.

·         Wages of per trainer for on the job training tk. 2000.00.

·         Wages of per trainee for on the job training tk. 1000.00.

·         Cost of materials development for training tk. 8000.00

Requirements:

·         What is the Cost of Training New Hire?

Training New Hire
Administrative functions related to the New Employee
	·         Hours  X Wage of Administrative Support $	=	$
Orientation
	·         Hours  X Wage of Trainer $	=	$
	·         Hours  X Wage of New Employee $	=	$
On-the-Job Training
	·         Hours  X Wage of New Employee $	=	$
	·         Hours  X Wage of Trainer $	=	$
	·         Hours  X Wage of Employees covering for New Employee $ X # of Employees covering	=	$
Information Literature  (manuals, brochures, policies, etc.)
	·         # of Manuals  X Cost of 1 Manual $	=	$
Total Cost of Training New Hire		=	$

Problem -09: An organization 10 full time and 3 part- time employees and average hour per week for full time employees is 40 and part-time employees is 20 Following cost are involved during the financial year 2012:

Sl.N.	Particulars	Amount ( tk)
	Revenue :
1	Sales	1300000
2	Sales discounts	150000
3	Sales returns	200000
4	Sales allowances	150000
5	house rent,	100000
6	Revenue from patents	50000
7	Bank profit	50000
	Expenses :
1	Cost of goods sold (COGS( costs of production of goods, labor, raw materials, etc):	300000
2	General and administrative (G & A ( officer salaries, legal and professional fees, utilities, insurance, depreciation of office building and equipment, office rents, office supplies):	200000
3	Selling General and Administrative (SGA) expenses((sales and employee salaries, advertising, shipping, travel expenses, commissions, etc):	50000
4	Research and development (R & D) expenses	80000
5	Depreciation and amortization charges:	40000
6	Interest Expense(costs of borrowing):	50000
7	Provision for income taxes	40000
8.	Other expenses or losses(charges not related to primary business operations):	50000

Requirements:

1.      Calculate the Revenue Per Employee?

2.      Gross Profit Per Employee?

3.      Operating Income Per Employee?

4.      Profit Per Employee?

Solution:

1.    Revenue Per Employee= Total Revenues / Number of Employees

Total revenues = net sales + others revenues

Net sales = Total sales – sales discounts- sales returns- sales allowances

                        = 1300000-150000-200000-150000

                        = 800000

Others revenues = house rent+ Revenue from patents+ Bank profit

                        = 100000+50000+50000

                        =200000

Total revenues = net sales + others revenues

                        = 800000+200000

                        =1000000

Number of employees = 10+ 3*(20/40) =11.5

Revenue per Employee= Total Revenues / Number of Employees

                                    = 1000000/11.5

                                    =Tk. 86956.52

2.      Gross Profit Per Employee= (Net sales - COGS) / Number of Employees

=800000-300000/ 11.5

=Tk. 43478.26

3.      Operating Income Per Employee= ((Total Revenues - (Total Expenses, excluding interest and taxes)) / Number of Employees)

Here,

Total revenues = 1000000

Total expenses = Cost of goods sold (COGS) + General and administrative (G & A) + Selling General and Administrative (SGA) expenses+ Research and development (R & D) expenses  +  Depreciation and amortization charges+ Interest Expense(costs of borrowing)  + Provision for income taxes+ Other expenses or losses- Interest Expense(costs of borrowing)  + Provision for income taxes

= 300000+200000+50000+80000+40000+50000+40000+50000-50000-40000

= 720000

Operating Income Per Employee= ((Total Revenues - (Total Expenses, excluding interest and taxes)) / Number of Employees)

= (1000000-720000)/11.5

= Tk. 24347.83

4.      Profit Per Employee=((Total Revenues - Total Expenses) / Number of Employees)

Here,

Total revenues = 1000000

Total expenses = Cost of goods sold (COGS) + General and administrative (G & A) + Selling General and Administrative (SGA) expenses+ Research and development (R & D) expenses  +  Depreciation and amortization charges+ Interest Expense(costs of borrowing)  + Provision for income taxes+ Other expenses or losses

= 300000+200000+50000+80000+40000+50000+40000+50000

= 810000

Profit Per Employee = (Total Revenues - Total Expenses) / Number of Employees)

= (1000000-810000)/11.5

= Tk. 16521.74