. In the preceding problem, using sensitivity analysis, if the productivity rati

Question

. In the preceding problem, using sensitivity analysis, if the productivity ratio was 13.1 the previous month, has productivity increased or decreased? By what percentage?

I am having a hard time understanding how the book came up with these answers. need it worked out so I understand the process

Productivity has decreased by 6.9% from the previous month.

The problem before this was

Based on the following data, calculate the single-factor productivity ratio using hours of labor for a housekeeping department. • Number of employees = 100 • Average hourly rate = $5.50 • Total hours worked in September = 15,570 • Total square feet maintained = 190,000

The single-factor productivity rate is 12.2 (190,000 square feet ÷ 15,570 hours worked).

Explanation / Answer

The productivity ratio is defined as Total Square feet maintained divided by the hours worked. So higher the productivity rate the higher is the square feet maintained per hour of work done.

Productivity ratio in previous month = 13.1

Productivity ratio in current month = 12.2

Change in productivit ratio = 13.1-12.2 = .9

Percantage change = (Change in productivity ratio*100)/ Productivity in previous month

= (.9 * 100)/13.1 = 6.9%

Sensitivity Analysis is done by calculating the outcome variable by changing the input variable in a certain range. The input variable are independent variables. The input variable are In this problem the details of sensitivity analysis is not shared however the variable can be Number of employees , Average hourly rate.

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