Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires

Question

Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes 1,000 tires per day with the following resources: Labor productivity per labor hour for these tires=2.5 tires/labor hour (round your response to two decimal places). Multifactor productivity for these tires=.0245 tires/dollar (round your response to four decimal places). The percent change in multifactor productivity if Fok can reduce the energy bill by $950 per day without cutting production or changing any other inputs= % (enter your response as a percentage rounded to two decimal places).

Explanation / Answer

a) Labour productivity per hour = 1000/400 = 2.5 tires

b) Multifactor productivity = 1000/ $31800 = 0.024

c) Multifactor productivity after reduction in cost = 1000/ 30850 = 0.0324

% change = 0.0324 - 0.0245 /(0.0245) = 32.24%

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