QUESTION 1 ing carts for supermarkets and other stores recently purchased some n
ID: 422065 • Letter: Q
Question
QUESTION 1 ing carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used S workers, who produced an average of 83 carts per hour. Workers receive S15 per hour, and machine coast was $45 per hour. With the new equipment, it was possible to usfer one of the workers to another department, and equipment cost increased by $16 per hour while output increased by four earts per hour. a) Compute the multifactor productivity (MFP) (labor plus equipment) under the Prior to buying the new equipmeat. The MP (carts/S) (round to 4 decimal places), b) Compute the productivity changes between the Prior to and after buying the new equipment. The productivity growth % (round to 2 decimal places) QUESTION 2 Compute the multifactor productivity measure for an 8 hour day in which the usable output was 653 units, produced by 7 workers who used 534 pounds of materials. Workers have an hourly wage of 19 and material cost is 1.2 per pound. Overhead is 1.5 times labor cost. The multifactor productivity (units S) - (round to 4 decimal places) QUESTION 3 A health club bas 3 employees who work on lead generation. Each employee works 35 bours a week, and is paid SI8 an hour. Each employee identifies an average of 305 possible leads a week from a list of 8,000 names. Approximately 10 percent of the leads become members aad pay a one time fee of $150. Material costs are $1S0 per week, and overbead costs are $988 per week. Calculate the multifactor productivity for this operation in fees generated per dollar of input. The multifactor productivity for this operation in fees generated per dollar of input (round to 4 decimal places)Explanation / Answer
Answer to question 1 :
Details prior to buying the new equipment :
Number of carts produced per hour = 83
Total labour wage paid per hour = $15/ worker x 5 workers = $75
Machine cost = $45
Total cost = Labour cost + Machine cost = $75 + $45 = $120
Multifactor productivity prior to buying the new equipment
= Number of carts produced/ Total cost
= 83/120
= 0.6916 carts per $
MULTIFACTOR PRODUCTIVITY PRIOR TO BUYING NEW EQUIPMENT
= 0.6916 CARTS PER $
Details after buying new equipment :
Revised output of shopping carts per hour = 83 + 4 = 87
Revised workforce = 4
Revised equipment cost = $45 + $16 = $61
Total labour wage paid per hour = $ 15/ labour x 4 = $60
Total equipment cost = $61
Total cost = Total labour cost + Total equipment cost = $60 + $61 = $121
Multifactor productivity
= Number of carts produced / Total cost
= 87 / 121
= 0.7190
Productivity change prior and after buying new equipment
= ( 0.7190 – 0.6916 ) / 0.6916 x 100
= 0.0274 /0.6916 x 100
= 3.96 % INCREASE
THE PRODUCTIVITY GROWTH = 3.96%
MULTIFACTOR PRODUCTIVITY PRIOR TO BUYING NEW EQUIPMENT
= 0.6916 CARTS PER $
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