Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle res F

Question

Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle res Fok makes 1 200 tires per day with the following ressurces Labor Raw Materia Enargy Capital 400 hours per day @$12 50 per hour 21,000 pounds per day @$1.00 per pound $5,000 per day $10,000 per day a) Labor productivity per labor hour for these tires-treslabor hour pound your response to two doma, places) b)Multifactor producthity forthesetim» tires dolar dround yourresponse fofourdeerta,places c) The percent change ih mutifactor productlivity it Fok can reduce the energy bill by $950 per day without cutting production or changing any other inputss (enter your response as a percentage rounded to two decimal places) Note calculate the new multflactor productivity to four decimal places before cabulating the percentage change Enter your answer in each of the answer bowes

Explanation / Answer

a) Labor productivity per labor hour for the tires = Output/Labor input = 1200/400 = 3 tires/labor hour

b) Multifactor productivity for these tires = 1200/(400*12.5)+(21000*1)+(5000)+(10000) = 0.0293 tires/dollar

c) New multifactor productivity = 1200/(5000+21000+4050+10000) = 0.02996 tires/dollar

Percent change = [(0.02996-0.0293)/0.0293]*100 = 2.26 %

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