The legal assistants at a prestigious law firm have proposed a new search engine
ID: 415148 • Letter: T
Question
The legal assistants at a prestigious law firm have proposed a new search engine for their use. They charge their clients $670 for each title search and pay their clerks $25.00 per hour. Currently, a typical search process requires 44 minutes of each person's time. With the new tool, they will need only 36 minutes per search but they will be charged $2.0 per search in fees. What is the percent change in multifactor productivity compared to the current search process? (Keep two decimal places in your answer)
Explanation / Answer
Current process :
Price paid by client = $670
Cost of search by each clerk = $25/ hour x 44 minutes = 25 x 44/60 = $18.33
Multifactor productivity = Price paid by client / Cost of search = 670/18.33 = 36.55
New process:
Price paid by client = Original price + search fee = $670 + $ 2 = $672
Cost of search by each clerk = $25/ hour x 36/60 = $15
Multifactor productivity = Price paid by client / Cost of search = 672/15 = 44.8
Percentage change in multifactor productivity
= ( Multifactor productivity in new process – Multifactor productivity in old process) / Multifactor productivity in old process x 100
= ( 44.8 – 36.55)/36.55 x 100
= 8.25/36.55 x 100
= 22.57 %
PERCENTAGE CHANGE IN MULTIFACTOR PRODUCTIVITY = 22.57%
PERCENTAGE CHANGE IN MULTIFACTOR PRODUCTIVITY = 22.57%
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