Incentive plans: formula for Rowan plan wages Let R = base time rate per hour, S = standard time for the job, and T = actual time taken. Using Rowan plan, write the total wages expression for the job.
Mechanical Engineering
Industrial Engineering and Production Management
Difficulty: Medium
Choose an option
-
AW = R T + ((S − T)/S) · R · T
-
BW = R T + R (S − T)
-
CW = R S
-
DW = R T · (S/T)
Answer
Correct Answer: W = R T + ((S − T)/S) · R · T
Explanation
GivenR = base rate per hour; S = standard time; T = actual time taken.
Concept (Rowan plan)Bonus is proportional to the fraction of time saved and the actual time worked:Bonus = (Time saved / Standard time) × (R × T) = ((S − T)/S) × (R T)
Step-by-stepTotal wages W = Time wages + BonusW = R T + ((S − T)/S) · R · T(Equivalently, W = R T (2 − T/S))
Why others are wrong(b) is Halsey (100% share) type, not Rowan.(c) ignores actual time and bonus.(d) simplifies to R S (nonsensical here) and is not the Rowan expression.
Final AnswerW = R T + ((S − T)/S) · R · T.