Assignment on Productivity Measurement: To be submitted Problem 1: The following

Question

Assignment on Productivity Measurement: To be submitted Problem 1: The following data are given for a small manufacturing firm: Previous year This year Value of the products $6,000,000 98,000 units $4.50 30,000 hours $20 per hour $500,000 $125,000 $6,500,000 110,000 units $5.00 26,000 hours $21 per hour $400,000 $150,000 Raw materials used Cost of materials per unit Labor hours used: Cost of labor Energy cost Other overhead costs (a) Determine partial productivity for labor for each year. (b) Determine multi-factor productivity for labor & materials for each year. (c) Determine the total factor productivity for each year. (d) Management would like to know the contribution of each input in determining the growth (or decline) in total factor productivity. Please prepare a worksheet to help management understand productivity changes for each factor input.

Explanation / Answer

B)

5.76

5.93

C)

D)

Use of Materials and other Overhead increasd. Use of Labour and energy were decreased .

Calculations:

% Changed = (This year input - Previous Year Input) / Previous Year Input Example:

Example:

% Changed (Energy) = ($ 400,000 - $ 500,000) / $ 500,000

= - $ 100,000 / $ 500,000

= -.2 Therefore, % Changed

= .2*100

= 20%

A) Calculation of Partial Productivity Partial productivity = Output / Input
Input= Cost of Labour Previous Year This Year Cost of Labour(Cost of Labour per hour *Labour hours Used) $600,000 $546,000 Output $6,000,000 $6,500,000 Partial Productivity for
labour 10 11.90

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