A company that makes shopping carts for supermarkets and other stores recently p

Question

A company that makes shopping 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 6 workers, who together produced an average of 90 carts per hour. Workers receive $16 per hour, and machine cost was $50 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by 4 carts per hour.

A company that makes shopping 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 6 workers, who together produced an average of 90 carts per hour. Workers receive $16 per hour, and machine cost was $50 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by 4 carts per hour.

A company that makes shopping carts for supemarkets 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 6 workers, who together produced an average of 90 carts per hour. Workers receive $16 per hour, and machine cost was $50 per hour. with the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by 4 carts per hour a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. (Round your answers to 2 decimal places.) carts per worker per Before hour carts per worker per After hour b. Compute the multifactor productivity under each system. Use carts per dollar cost (labor plus equipment) as the measure. (Round your answers to 2 decimal places.) Betore Ater carts/dollar cost carts/dollar cost C. Comment on the changes in productivity according to the two measures. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "%" signs in your response.) Labor Multifactor selec |by (Click to selec-by productivity

Explanation / Answer

Before:

Output = 90 carts

Labor input = 6 labors

Labor cost= 6 labors x $16 per labor = $96

Machine cost = $50 per hour

Total cost = labor cost + machine cost = $96+$50 = $146

After

Output increased by 4 carts. So output = 90+4 = 94 carts

One of the workers was transferred to another department. So Labor input = 6 - 1 = 5 labors

Labor cost = 5 labors x $16 per labor = $80

Machine cost increased by $11. So machine cost= $50+$11 = $61

Total cost = labor cost +machine cost = $80+$61 = $141

a) Labor productivity before = output/labor input

= 90 carts / 6 workers

= 15 carts per worker per hour

Labor productivity after = output / labor input

= 94 carts / 5 labors

= 18.8 carts per labor per hour

b) Multifactor productivity before = output / Total cost

= 90 / $146

= 0.62 carts per dollar cost

Multifactor productivity after = output / Total cost

= 94 carts / $141

= 0.67 carts per dollar cost

c) change in labor productivity = [(labor productivity after-labor productivity before)/labor productivity before] x 100

= [(18.8 - 15) / 15] x 100

= (3.8/15)x100

= 25.33%

So labor productivity increased by 25.33%

Change in Multifactor productivity = [(productivity after - productivity before) / productivity before] x 100

= [(0.67 - 0.62) / 0.62] x 100

= (0.05 /0.62)x 100

= 8.06%

Therefore the Multifactor productivity increased by 8.06%.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.