QUESTION 3 A health club has 3 employees who work on lead generation. Each emplo

Question

QUESTION 3 A health club has 3 employees who work on lead generation. Each employee works 35 hours 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 and pay a one-time fee of $150. Material costs are $180 per week, and overhead 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

Input

Payment done to the 3 employees in a week = 3*35*18 = $1890

Material Cost per week = $180

Overhead Cost per week = $988

Total Cost involved = $(1890+180+988) = $3058

Output

Total number of leads identified by the 3 employees = 3*305 = 915

Converted into members = 10% of 915 = 91.5

One time fee paid by these members = 91.5*150 = $13725

Therefore, the multifactor productivity for this operation in fees generated per dollar of input = $13725 / $3058 = 4.4882

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